&EPA
United States
Environmental Protection
Agency	
Office of Water
(4606)
EPA816-R-99-001
January 1999
Prioritizing Drinking Water Needs:
A compilation of State priority systems
for the Drinking Water State Revolving Fund program
Office of Ground Water and Drinking Water
January 1999

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    Table of Contents
I.    Introduction


II.    Acronym List


III.   State List (alphabetical)
IV.   State Summaries and Priority Systems
     (by region)

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                                       INTRODUCTION
The Drinking Water State Revolving Fund (DWSRF) program was authorized by the 1996 Amendments
to the Safe Drinking Water Act (SDWA), which were signed into law on August 6, 1996. The program
provides each State with a source of funding to continue to ensure that the public is provided with safe
drinking water. A State uses capitalization grants awarded by EPA to establish a Fund from which loans
and other types of financial assistance are provided to eligible publicly- or privately-owned community
water systems and nonprofit non-community water systems to finance the cost of infrastructure
improvements.

To determine which projects receive priority for funding, each State must develop a priority system for
ranking individual projects based on three objectives mandated in the SDWA. A State must, to the
maximum extent practicable, give priority to projects that:

•   address the most serious risk to human health;
•   are necessary to ensure compliance with the requirements of the SDWA (including requirements for
    filtration); and
•   assist systems most in need, on a per household basis, according to affordability criteria developed by
    the State.

The SDWA envisions that a State will fund DWSRF projects in priority order, unless the project is not
ready to proceed1. Since  public involvement is an important element of the DWSRF program, a State's
priority system  must be sufficiently detailed to permit the public and potential applicants to readily
understand the criteria used to rank projects.

This document is  a comprehensive compilation of the priority systems developed by the States for their
DWSRF program capitalization grants. While each  State is required to include the three statutory
objectives as primary factors, there is considerable variation in the structure of priority systems.

For easy reference, this document groups the States by EPA Region.  An index, in alphabetical order by
State, can also be  found following this introduction.  Throughout the document, links appear in pink to
facilitate navigation. A brief 1-2 page summary has  been developed for each State, followed by the
complete priority  system.

The first section of each State summary, entitled "Priority Ranking Criteria," documents the ranking
method employed by the  State. Although each State  must address the three objectives mandated by the
SDWA,  many  States have chosen to develop additional categories, which reflect each of the required
objectives.  For example, North Carolina gives bonus points to systems that have source water protection
and management  programs in place. States that include numerous categories may grant fewer points for
categories considered less relevant to them. It is important to note that although States may award points
for criteria other than the  three SDWA-mandated objectives, these points should not be sufficient to elevate
a low priority compliance, public health, or affordability project over a high priority one.  Some  States
         It should be noted that EPA allowed States to include readiness to proceed as a factor in their priority
systems for the first two years of the program in recognition of the fact that highly ranked projects may not have been ready to
apply for assistance. This factor, where included, will be removed from future priority systems.  A State will, however, be
able to assess readiness to proceed when developing a fundable list of projects from its comprehensive list of projects eligible
to receive assistance.

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have developed categories which address more than one of the required objectives.  For example, Maine
grants points for the compliance objective and the public health objective together under one category,
"Compliance and Public Health."

Nearly all States grant more points for compliance and public health criteria categories than for
affordability criteria categories. The affordability criteria must be explicitly defined by each State.
 Most States base  their affordability criteria on median household income (MHI), often comparing the
MHI of the system's service population to the State MHI. However, some States take into account
system user rates, or use more complex equations, such as Tennessee's "ability to pay index" developed by
the University of Tennessee Center for Economic and Business Research.

Although most States prioritize by using point categories, several States determine ranking by placing
projects in different priority classes and then granting points to rank projects within these classes. For
example, Nevada's priority system assigns projects to one of four classes: projects addressing acute
health problems, projects addressing chronic health problems, projects addressing inadequate public
water system (PWS) conditions, and projects  involving refinancing of existing debts. Projects in the first
class are always given higher priority than those in any of the following classes. Within each class,
projects are ranked by different point categories (e.g., the type of water system, affordability,
population).

In addition to the Priority Ranking Criteria section, we have included a "Notes" section in many State
summaries to explain other ranking determinants or constraints. Any bonus points, incentive points, or
State-specific ranking guidelines fall under the Notes section.  Many States stipulate that only a certain
percentage of the capitalization grant may be  loaned to a single project or specify a ceiling on loans.  The
Notes section also discusses tiebreakers for States that have  specified one in the event that two or more
projects receive the same number of points. Tie-breaking procedures are often based on the service
population of the system represented.  Tie-breaking procedures may also be based on type of water system,
points received in one  of the categories in the Priority Ranking Criteria section, affordability, postmark date
of the application, or other criteria.

We hope that this compilation will be of interest to staff implementing DWSRF programs in all States
and to the general public. If you would like more information about the DWSRF program, including
State contact names, consult EPA's DWSRF  web page at http://www.epa.gov/safewater/dwsrf.html.

Notice to States

This compendium generally includes those priority systems  that were submitted by States for their Fiscal
Year 1997 capitalization grant applications. The compendium will be periodically updated to reflect
revised priority systems.  States are encouraged to contact their Regional DWSRF coordinator if they have
questions about the material presented within this document.

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                                 ACRONYMS
AWWA -     American Water Works Association
CMHI -      Community Median Household Income
CWS -       Community Water System
DEP -        Department of Environmental Protection
DOH-       Department of Health
DNR -       Department of Natural Resources
DWSRF -     Drinking Water State Revolving Fund
EPA -        Environmental Protection Agency
ERU -       Equivalent Residential Unit
GWUDI -     Ground Water Under the Direct Influence of Surface Water
IOC -        Inorganic Compound
IUP -        Intended Use Plan
MCL -       Maximum Contaminant Level
MHI -        Median Household Income
NOV -       Notice of Violation
NPDWR -    National Primary Drinking Water Regulations
NTNCWS -   Nontransient Noncommunity Water System
O&M -       Operations and Management
PQL -        Practical Quantitation Limit
PWS -       Public Water System
SMHI -      State Median Household Income
SDWA -      Safe Drinking Water Act
SNC -        Significant Non-Complier
SWTR -      Surface Water Treatment Rule
TCR -        Total Coliform Rule
TDS -        Total Dissolved Solids
THM -       Trihalomethanes
TNCWS -     Transient Noncommunity Water System
URTH -      Unreasonable Risk to Health
VOC -       Volatile Organic Compounds

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     STATE               REGION

Alabama                            IV
Alaska                             X
Arizona                            IX
Arkansas                            VI
California                           IX
Colorado                            VIII
Connecticut                          I
Delaware                            III
Florida                             IV
Georgia                            IV
Hawaii                             IX
Idaho                              X
Illinois                             V
Indiana                             V
Iowa                               VII
Kansas                             VII
Kentucky                            IV
Louisiana                           VI
Maine                               I
Maryland                           III
Massachusetts                        I
Michigan                           V
Minnesota                          V
Mississippi                          IV
Missouri                            VII
Montana                            VIII
Nebraska                            VII
Nevada                             IX
New Hampshire                       I
New Jersey                          II
New Mexico                        VI
New York                          II
North Carolina                       IV
North Dakota                        VIII
Ohio                               V
Oklahoma                          VI
Oregon                             X
Pennsylvania                        III
Puerto Rico                          II
Rhode Island                         I
South Carolina                       IV
South Dakota                        VIII
Tennessee                           IV
Texas                              VI
Utah                               VIII
Vermont                             I
Virginia                            III
Washington                         X
West Virginia                       III
Wisconsin                          V
Wyoming                           VIII

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                                         CONNECTICUT
Priority Ranking Criteria

Projects will be prioritized based on points accrued in the following six categories:

•   Quality - Points will be given to projects that seek to eliminate water quality problems. Points may be
    given from 4 subcategories and points per criterion range from 10 to 50 points.  For example, projects
    addressing immediate risks (turbidity, microbiological, etc.) will receive 50 points, while projects
    addressing physical problems such as pH or odor will receive  10 points.

•   Quantity Violations with Health Implications - Points will be given to projects that seek to eliminate
    water quantity problems.  Up to 40 points will be given for each supply or pressure issue (e.g., 40 points for
    insufficient supply, 20 points for pressure violations). A project that implements water conservation
    measures will receive 15 points.

•   Acquisition/Transfer - Points will be given for consolidation by acquisition or interconnection that enables
    a system to operate in compliance with State and federal law.  Twenty-five points will be given for projects
    in which an existing PWS is acquired for consolidation and 15 points per each interconnection with other
    PWSs.

•   Proactive Infrastructure Upgrades - Projects may receive a maximum of 15 points in this category. Five
    points will be given to projects for each example of a proactive infrastructure  upgrade (e.g., main
    replacement/improvement, system automation, or leak detection).

•   Source/Distribution System Protection - Points will be given for protective  measures involved in a
    construction project funded by the DWSRF such as correcting well construction violations (20 points),
    purchase of land (5 points) or implementation of best management practices on watersheds (10 points).

•   Affordability - Ten points will be given to projects in towns where the MHI is equal to or less than 80
    percent of the State's average MHI.
Notes
    Tie-Breaking Procedure - In the event of a tie between two projects, the applicant with the larger
    population will be given priority.

    Population - To ensure that a minimum of 15 percent of funding is dedicated to small water systems,
    projects will also be ranked according to system size, with 15 percent of funding directed towards the
    smallest systems (serving up to 1,000 people) and 35 percent directed to systems serving between 1,000 and
    10,000 people.

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                                     CONNECTICUT

                   CONNECTICUT DEPARTMENT OF PUBLIC HEALTH
                       PRIORITY RANKING SYSTEM FOR PROJECTS
   ELIGIBILITY FOR DRINKING WATER STATE REVOLVING FUND (DWSRF) LOANS

INTRODUCTION:

The Connecticut Department of Public  Health (DPH) will establish and maintain a priority list of eligible
drinking water projects and will establish a system setting the priority for making project loans to eligible
public water systems (PWS). This ranking system is delineated in this document. The statutory authority
for establishing the Drinking Water  State Revolving  Fund (DWSRF)  is embodied in Public  Act 96-181
which states the following:

"The DPH shall establish and maintain  a priority list of eligible drinking water projects and shall establish
a system setting the priority for making  project loans to eligible PWS. In establishing such priority list and
ranking system, the  Commissioner of Public Health  shall consider all factors  which he deems relevant,
including  but  not limited to the following: (1) the public  health  and  safety; (2) protection of the
environmental resources; (3) population affected; (4) risk to human health; (5) PWS most in need on a per
household basis  according to applicable State affordability criteria; (6) compliance with the applicable
requirements of the Federal  Safe Drinking Water Act and other related Federal Acts; (7) applicable State
and Federal Regulations. The priority list of eligible drinking water projects shall include a description of
each project and its purpose, impact, cost and construction schedule, and an explanation of the manner in
which priorities were established. The Commissioner of Public Health shall adopt an interim priority list of
eligible drinking water  projects  for the  purpose of making project  loans prior  to adoption  of final
regulations, and in so  doing may utilize existing rules and  regulations of the department relating  to the
program.   To the extent required  by applicable Federal Law,  the  DPH and the Commissioner of
Environmental Protection shall prepare any required Intended  Use Plan with respect to eligible  drinking
water projects; (8) consistency with the Plan of Conservation and Development; (9)  consistency  with the
policies delineated in Section 22a-380;  and (10) consistency with the  coordinated Water System Plan in
accordance with subsection (f) of Section 25- 33d, as amended."

INTENDED USE PLAN (IUP)

Annually the DPH will also  prepare an IUP that identifies how the State intends to use available DWSRF
funds.  The IUP will  be submitted to  the U.S. Environmental Protection Agency  (EPA) as part  of the
DPH's  annual capitalization grant application for DWSRF funds.  The IUP will identify the ranked eligible
projects in a priority list and will include specific detail on how the State intends to use set-aside funds
designated under the DWSRF program.

PRIORITY RANKING SYSTEM

Each year the DPH will solicit planning, design  and construction projects from community and non-profit,
non-transient, non-community,  PWSs to determine the ranking of projects eligible for loans under the
DWSRF program. Ranking will be assigned utilizing DPH's priority ranking system described further in
this text.

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DPH will fund planning and design projects which may lead to construction projects. Planning and design
projects will be included in the ranked priority list and will be given ranking points in accordance with the
appropriate activity that the project intends to  address (e.g., treatment would get points for addressing
various water quality problems).

In developing the ranking system, the  DPH has made  quality and adequate quantity of drinking water the
highest priority in an  effort to provide maximum  public health benefits.  Public Health Code  (PHC)
compliance with water quality standards and adequate quantity  of drinking water are given the highest
points within the ranking system.

This is consistent with the Safe Drinking Water Act (SDWA) Amendments of 1996 which indicate that the
Intended Use Plan (IUP) shall provide  to the maximum extent practicable,  that priority for the use of funds
be given to projects that:

        i.      addresses the most serious risk to human health;

        ii.      are necessary to ensure compliance with the requirements of this title including
               requirements for filtration; and

        iii.     assist systems most in need on a per household basis according to state affordability
               criteria.

Connecticut's ranking process capitalizes on the SDWA by ensuring that all projects are reviewed from the
perspective of risk to health and compliance with regulations as noted. Category I deals with various water
quality risks while Category II deals with the need to maintain adequate supply so that lack of pressure
does not create health risks by introducing contamination from the distribution system.  Category III allows
water systems to be restructured financially, managerially or technically  so that they operate in compliance
with State  and Federal law.  Categories  IV and  V  allow  for  improvements in source,  treatment and
distribution to allow for the continuation and satisfactory operation so that health risks from infrastructure
failure is averted.

Projects will be ranked in three population categories:

        1.      Small systems serving less than or equal to 1,000 population.
        2.      1001 to 10,000 population.
        3.      10,001 and greater population.

 1.      The purpose of this process is to ensure that a minimum  of 15% funding is  dedicated to small
        water systems as required by the SDWA Amendments of 1996.

2.      Each fiscal year DPH will compile only one comprehensive priority list of ranked projects for the
        IUP. This priority list will be compiled from the rankings in the  three population categories.

3.      The final priority list will rank all projects based on the ranking criteria and will identify which
        systems are anticipated to be funded for a particular fiscal year.

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Every project submitted to DPH will be identified by the PWS identification number utilized by the State
and Federal Government for the inventory of PWSs.  Unless otherwise justified to DPH, the population
number the DPH currently has on inventory for that water system will determine which population category
the project falls under.

Connecticut's DWSRF priority ranking system assigns criteria points for each project deemed eligible for
funding.  The six major categories are  as follows:

       I.      Quality
       II.     Quantity
       III.     Acquisition/Transfer
       IV.     Proactive Infrastructure Upgrades
       V.     Source/Distribution System Protection
       VI.     Affordability

The total numerical score for a project is arrived at by tallying points from each of the 6 categories:

                             (I+II+III+IV+V+VI = Total Score).

Projects which address several quality  and/or quantity issues can be added together to increase the total
score.

The projects are ranked by total score and those in the upper quartile are identified.  The DPH may make a
final determination of award among projects which fall in the upper quartile of all ranked projects.

ELEMENTS  FOR ESTABLISHING THE PRIORITY RANKING OF PROJECTS FOR THE DWSRF:

The following outline represents the elements involved in the ranking of projects eligible for funding in the
DWSRF.

1.     Priority Ranking System:

       I.       Quality (Violations)
               A. Immediate
               B. Long Term
               C. Water Quality Goals
               D. Physical
       II.      Quantity (Violations)
       III.     Acquisition / Transfer
       IV.     Proactive Infrastructure Upgrades
       V.     Source / Distribution System Protection
       VI.     Affordability

2.     By-Pass Procedure / Emergency By-Pass Procedure

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3.      Project Ranking Category by Population is as follows:

       A.      Small systems less than or equal to 1000 population - * 15% of funds
       B.      Systems 1001 to 10,000 population - *35% of funds
       C.      Systems 10,001 and greater - * 5 0% of funds

               Target goals subject to revision on demand for DWSRF loans.

4.      General Provisions:

       Tie Breaking Process:

       In circumstances where more than one system has an equivalent ranking score, the size of the
       population served by the system will be used in breaking the tie.  The larger population will be
       given preference.

5.      Criteria

       Description of Ranking Elements

       The following describes in detail the elements involved in the ranking of projects eligible for
       funding in the DWSRF.

1.)     Priority Ranking System

       I.      Quality: Violations of Water Quality are divided into four
               subcategories: immediate, long-term, water quality goals, and physical.

       A.     Water quality violations requiring immediate action include turbidity, microbiological,
              nitrate and/or nitrite and lead exceedances. These violations pose health risks which must
              be brought into compliance expeditiously.

       B.     Violations of water quality which have health risk ramifications over extended periods of
              time include the following subcategories: inorganic chemicals, pesticides, herbicides,
              PCB's, organic chemicals, radioactivity and treatment technique's (e.g., groundwater under
              the direct influence of surface water and concentration/time of disinfectants). Violations
              sufficiently  severe as to present acute health risks may be elevated to Category I A.

       C.     Water quality goals include parameters for which DPH has determined a health risk exists
              even though the parameter is not yet regulated. For these parameters DPH has set formal
              action levels prior to development of a federal regulation. This category also includes a
              preventative measure by allowing ranking points for systems which have not exceeded
              MCLs but nonetheless have determined that steps are necessary to reduce human exposure
              and risk associated with a water quality concentration that is elevated and approaching an
              MCL.

       D.     The physical element of the water quality category allows points for parameters that are
              primarily deemed aesthetic/physical rather than having significant health ramifications.

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II.      Quantity: The quantity category includes violations for quantity of supply deficiencies and
        problems where the water system is unable to sustain the adequacy of water as prescribed
        by the PHC including: source deficit, system capacity deficits, lack of source (production)
        meters, pressure violations, and supply deficiencies including insufficient margin of safety.

        Implementation of conservation measures is also given ranking credits.  This recognizes
        conservation as an effective means for efficient utilization of drinking water sources for
        both supply and demand.

        Connecticut has always considered quantity a very important issue which has health
        implications.  Inadequate supply translates to poor or inadequate pressure which can lead
        to backsiphonage and potential contamination of the water distribution.  Even with active
        cross connection programs to correct the possibility of contamination, lack of pressure
        may result in accidental contamination events.

III.     Acquisition/Transfer: Acquisition/transfer ranking points gives acquiring systems
        additional points for projects which include acquisition of other system. Acquisitions can
        be by direct interconnections or satellite ownership (own and operate smaller public water
        systems).

IV.     Proactive Infrastructure Upgrades: Proactive or elective infrastructure upgrades include
        upgrades to physical  facilities that have  or shortly will have served their useful life span,
        or the construction of new and more efficient facilities.  In many cases, these facilities
        need replacement and/or major reconstruction even though their condition has not resulted
        in a violation.  These types of facilities include but are not limited to: treatment facilities,
        pumping facilities, main replacement /improvement treatment residuals management,
        storage tanks repair / replacement, source development, and inter- connection through
        main extensions (not intended for system growth), system automation,
        posting/fencing/security measures and main extensions to existing private wells with public
        health concerns.

V.      Source/Distribution System Protection:  Source/distribution ion system protection projects
        reinforce protective measures necessary to ensure the safe delivery of potable water.
        These measures must be directly related to a construction project being funded by the
        DWSRF. The protection measures include: purchase of land, implementation of Best
        Management Practices (BMPs) on watersheds, and source distribution violations of the
        PHC, and other source protection improvements. (See attached Source System Protection
        Detail)

VI.     Affordability: Affordability in addressed in Category VI of the Priority Ranking System
        Criteria.  The maximum obtainable points in this category is 10. Water systems proposing
        projects in the following towns: Bridgeport, Griswold, Hartford, Killingly, New Britain,
        New Haven, New London, Norwich, Putnam, Sterling, Waterbury and Windham will be
        given 10 Points since the Median Household Income  (MHI) of these towns is less than
        80% of the State's average MHI ($33,376) as determined by the 1990 census.

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2.)      By-Pass Procedure:

Actual loan awards are contingent on the water system's readiness to proceed.  If for some reason a water
system is not ready to proceed in a timely fashion, the DPH may select another eligible project for funding
based on that system's ability to initiate the project as well as on its completion period. A project may also
be by-passed if the applicant has withdrawn its application.

This By-Pass process is necessary to ensure  that available  DWSRF funds will be disbursed in a timely
fashion.

        Emergency By-Pass Procedure:

In cases of unexpected circumstances which develop into severe  public health risk, there may be a need to
By-Pass projects ranked on the project priority list. When such a situation  arises, the Commissioner of
Public Health in consultation with the Commissioner of Environmental  Protection or their  respective
designees, may make a project loan with respect to an eligible drinking water project without regard to the
priority list  of eligible drinking water projects.  The Commissioner may similarly make a project  loan
without regard to the priority list of eligible drinking water projects if a public drinking water  supply
emergency exists, pursuant to Connecticut General Statute Sec 25-32(b).

3.)      Project Ranking Categories by Population:

        A.     Small systems serving equal to or less than 1.000 population

               In order to ensure that small  PWSs receive  the required share of available loan money,
               DPH proposes to rank small systems separately from larger ones so that the minimum  15%
               funding level  as required by SDWA is made available to those systems. If, however,  loan
               fund demands for eligible projects are less than 15%, DPH may reassign extra funds to the
               priority lists for larger PWS (systems serving 1,000 or more people.)

        B.      Systems serving greater than 1.000 population but less than or equal to 10.000

               Water systems in this population category are being allocated approximately 35% of the
               total available loan funds in order to ensure that these systems will have  an opportunity for
               funding. Unallocated funds could be distributed to either of the two other population
               categories.

        C.      Systems serving greater than 10.000 people

               Water systems in this population category are being allocated approximately 50% of the
               total available loan funds in order to ensure that these systems have an opportunity for
               funding.

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4.)      General Provisions

Eligible projects must be submitted in a timely fashion to DPH with sufficient technical documentation,
data, reports, certifications, etc.  Incomplete or inadequate information may invalidate eligible project for
making the current project priority list.

Projects identified by the DWSRF Program Guidelines as not being eligible for funding include the
following:

        1. Dam Projects
        2. Developing Water Systems for Growth
        3. Fire Protection (only)

Tie Breaking Procedure
        (See narrative on page 4)

Connecticut Department of Public Health (DPH) Review of Projects

Connecticut DPH will utilize the PHC, Regulations of Connecticut State Agencies Sec. 16-260m-l through
16-260m-9, Recommended Standards for Water Works (latest edition) as well as other relevant regulations
or statutes to evaluate projects for eligible funding.

5.)      Criteria

Please see the attached criteria for DWSRF (Priority Criteria for Individual Eligible Projects under
DWSRF).

                               SOURCE SYSTEM PROTECTION DETAIL

Source/Distribution Violation                                                           20 points

        •       Correcting well construction violations.

               (casing extensions, eliminate pounding around well head, pitless adapter,
               repair/replacement, well seal replacement, etc.)

        •       Generally any source or distribution protection violations not
               addressed under any other category.

        •       Storage tanks properly vented/protected.

Purchase of Land                                                                      5 points

        •       Purchase of land to develop new sources or construct treatment facilities, pumping stations
               storage tanks, etc.

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Implementation of Best Management Practices                                           10 points

Activities associated with construction projects that involve constructing drainage basins, detention basin,
relocation of culvents, installation of drainpipes, erosion control measures construction of berms or rip rap,
etc.

Source Protection Improvements                                                       5 points

Activities, associated with construction projects, that in order to improve source protection; removal of
septic systems; prevention of spillage (deletion basing roadway reconstruction to improve runoff
quality, etc.)
                                                CRITERIA
                        DRINKING WATER STATE REVOLVING FUND (DWSRF)
                        (Priority Criteria for Individual Eligible Projects under DWSRF)
                              CT DEPARTMENT OF PUBLIC HEALTH (DPH)
                                   WATER SUPPLIES SECTION (WSS)

CATEGORY
I.      Quality:
              A. Immediate                  Turbidity (Surface Water) Violation                 50
                                            Microbiological Violation                          50
                                            Nitrate/Nitrite Violations                           50
                                            Lead Exceedance                                 40

              B. Long-Term                 Inorganic Chemical violations                      30
                                            Pesticides,  Herbicides & PCBs Violation             30
                                            Organic Chemical Violations                       30
                                            Radioactivity Violations                           30
                                            Treatment Technique Violations
                                            - Groundwater Under Direct Influence               30
                                            - Concentration/Time                              30

              C. Goals                      Exceeding DPH Action Levels                      15
                                            Approaching MCL                                15

              D. Physical                    Color Violation                                  10
                                            pH Violation                                     10
                                            Odor Violation                                   10
                                            Turbidity (Ground Water) Violation                 10
II.     Quantity:
                                            Source Deficit or Insufficient margin of Safety        40
                                            System Capacity Deficit                           40
                                            Lack of Source (production) Meters                 20
                                            Pressure Violation                                20
                                            Implementation of Conservation Measures           15

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III.    Acquisition/Transfer:
                                            Acquiring Existing PWS Systems                   25
                                            Replacement of PWS System through interconnection (15
                                            points per each PWS)                              15
IV.    Proactive Infrastructure Upgrades (Max. of 15 points from this category):

                                            Treatment Facilities
                                            Pumping Facilities
                                            Main Replacement/Improvement
                                            Treatment Residuals Management
                                            Storage Tanks
                                            Source Development
                                            Main Extension for Interconnection
                                            System Automation
                                            Main Extension To Existing Private
                                            Wells With Public Health Significance
                                            Leak Detection
                                            Distribution Meters
                                            Posting/Fencing/Security Measures
V.
Source System Protection*:
                                            Source/Distribution Violations
                                            Purchase of Land
                                            Implementation Best Management Practices
                                            (BMP) on Watersheds
                                            Source Protection improvements
                                            *As it relates only to construction projects.

                                            Affordability
                                            Systems having projects in towns where the
                                            Mean Household Income is 80% of the
                                            State's Average
                                                                                      20
                                                                                       5

                                                                                      10
                                                                                       5
                                                                                      10

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                                               MAINE
Priority Ranking Criteria

Projects will be prioritized based on points accrued in categories A and B below. Under category A, points will
be given for only one item in only one sub-category. In category B, points will be given for one criterion in
each of the sub-categories. Total Project Priority Point Score = A + Bl + B2 + B3  + B4.  Also note that points
may be added for funding incentives (see Notes).

(A) Type of Project - Points will be given for only one of the sub-categories 1-7

•   Compliance and Public Health - Points may be given to projects depending on the severity of the threat
    posed to public health and the method used to address the problem.  For example, more points will be given
    for the installation of treatment (70-99 points) or the replacement of a contaminated source (69-95 points)
    than for the rehabilitation of instrumentation/controls, transmission/distribution mains, and storage (20-40
    points).

•   Low Pressure Problems - Points may be given to projects that address low pressure problems. Points
    range from 43 for backflow prevention to 22 for larger main installations.

•   Future SDWA Regulations - Points may be given to projects that address compliance with future SDWA
    regulations. Projects associated with Enhanced Surface Water Treatment will be given 15 points, while  a
    minimum of 9 points will be given to projects that address sulfate problems.

•   Aesthetics - Eight points may be given to projects that address problems with taste, color, odor, etc of
    water.

•   Construction for Source Protection - Points may be given to projects involving the construction of
    facilities intended to protect a water systems source supply.  For example, 72 points for systems using
    unfiltered surface water under a filtration waiver, 62 points for systems using filtered surface water, and 52
    points for systems using ground water.

•   Redundant Facilities - Points may be given to projects to install redundant facilities.  Installation of a
    facility to address supply problems will receive 68 points, while projects that address transmission main
    problems will receive 18 points.

•   Other Eligible Projects - Points may be given for three other project types:  facility consolidation (65),
    resolution  of dead-end water quality problems (34), or installation of meters (16).

(B) Add-Ons - Points will be given in all sub-categories (B1)-(B4) based on only one criterion

•   System  Compliance/Enforcement Status  - Points may be given to projects that address specific
    compliance and enforcement issues.  Points (between 8 and  30) may be given for only one item.  For
    example, 30 points will be given to a system faced with a court action or civil penalty assessment, while 8
    points will be given to systems with Active Bi-Lateral Compliance Agreements with the State. Priority
    points will be given only to proposed projects that address the compliance/enforcement issue in question.

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    Affordability - Up to 24 points will be given to systems based on the ratio of the average
    residential water bill to MHI. For example, systems will receive 24 points if the residential
    water bill is greater than 2.25 percent of MHI.  Fewer points will be given as the percentage
    of the MHI that is paid for water decreases.

    Population Served - Points will be awarded based on the population that is served by the
    system with an emphasis on systems serving less than 10,000 people. The maximum number
    of points (10) will be given to systems serving between 3,300 and 9,999 people, while fewer
    points will be given to systems  serving either smaller or larger populations.

    Public Water System Type - Six points will be given to CWSs, 3 points to NTNCWSs, and 1
    point to TNCWSs.
Notes
    Funding Incentives - If DWSRF funds are needed to complete the financing of a project and
    will also offer the best financial package, 15 bonus points will be given.

    Maine has created a priority system for set-aside activities, ranking projects that apply to land
    acquisition, source-water protection (available only to CWSs), and assistance for Capacity
    Development and Wellhead Protection.

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            State of Maine Drinking Water State Revolving Loan Fund
                                  1998 Intended Use Plan
The scoring system that will be used for ranking requests for DWSRF financial assistance is as follows:

I.      Standard Projects (only one priority point score to apply to each project)

   a.  Type of project Priority points

     1) Projects to address compliance and public health issues:
       Installation of treatment for:
         acute contaminants                                        99
         non-acute                                                80
         chronic                                                  70

       Replacement of contaminated source with uncontaminated
         from existing source of: river/stream                        95
         lake/pond/impoundment                                   90
         GWUDI                                                 85
         dug well                                                 77
         spring                                                   75
         filtered surface water                                      69

       Replacement of aging infrastructure at risk of causing contamination-type of facility:
         uncovered f w. storage                                    60
         treatment facility                                         55
         source-intake structure                                    45
         pump station                                             42
         storage                                                  40
         transmission mains                                        35
         distribution mains                                        33
         instrumentation/controls                                   30

       Rehabilitation of aging infrastructure or upgrade of existing facilities at risk of contamination-
         type of facility: treatment facility                           44
         source-intake structure                                    25
         pump station                                             23
         storage (inside painting)                                   20
         transmission mains                                        18
         distribution mains                                        17
         instrumentation/controls                                   15

     2) Installation of facilities to address low system pressure problems:
         backflow prevention devices                               43
         storage                                                  32
         booster pump station                                      24
         larger mains                                              22

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  3) Projects for compliance with future SDWA regulations:
      Proposed rule: Enhanced Surface Water Treatment             15
      Groundwater Disinfection                                   14
      Disinfectants/Disinfection Byproducts                        13
      Radon                                                     12
      Radionuclide                                               11
      Arsenic                                                    10
      Sulfate                                                    9

  4) Projects to address aesthetics: taste, color, odor, etc.              8

  5) Construction of facilities around a water system's source to address a health threat:*
  source type:
    unfiltered surface water w/ filtration waiver                     72
    filtered surface water                                          62
    groundwater                                                  52

  6) Installation of facilities to provide redundant facilities:
    supply (present peak day supply problems)                      68
    disinfection equipment                                        56
    treatment train                                               50
    supply source                                                47
    source-intake structure                                        32
    river crossing                                                29
    pump station                                                 21
    storage                                                      19
    transmission main                                             18
* Source water protection activities are not eligible for funding with Project Funds but may be eligible for
Other Non-Project Activity set-aside funds.

  7) Other Eligible Projects:
    System viability: Facility consolidation                          65
    Resolution of dead end water quality problems                   34
    Installation of meters                                          16

b.   Priority Point System Add-ons (only one priority point score for each category applies and is to
    be added with each category's score including project points to produce the final project
    priority rank)

Priority points

  1) System compliance/enforcement status*
      Court action or Civil Penalty assessment                      30
      Assessed Administrative Penalty                             25
      Active Administrative Compliance/Consent Order             20
      Loss of Filtration Avoidance/Exemption                      18
      On long-term Boil Water Order (>1 year)                     16
      In Significant Non-Compliance                               14
      Outstanding Notice of Non-Compliance                      12

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         Outstanding Treatment Technique Violation                 10
         Active Bi-lateral Compliance Agreement                    8
   * These priority points are only added if proposed project addresses the
   compliance/enforcement issue in question.

    2) Percentage of annual residential water bill of median household income
         Greater than 2.25%                                       24
         between 2.01% and 2.25%                                 18
         between 1.76% and 2.00%                                 12
         between 1.51% and 1.75%                                 9
         between 1.26% and 1.50%                                 6
         between 1% and 1.25%                                    3
         less than 1%                                             1

    3) Population served
         100,000 people or more                                   1
         between 10,000 and 99,999                                3
         between 3,300 and 9,999                                  10
         between 500 and 3,299                                    8
         less than 500 people                                      6

    4) Public Water System Type
         Community                                              6
         Non-Transient                                           3
         Transient                                                1

Water systems should inform the DWSRF Program of financing they are attempting to secure or have secured
from other agencies (Rural Utility Services (RUS), Department of Economic and Community Development
(DECD), etc.) for projects they are also attempting to finance with DWSRF funds.  The Program will work to
inform systems of their eligibility for funds from other agencies and will promote the application for these
funds when the other agency presents a better financing package for the system or has available funds for
which their project is eligible. The Program will the combined use of DWSRF funds and funds from other
agencies if the DWSRF  funds are necessary to complete the financing of the project. These projects will
receive an additional 15  priority points.  The Program will not authorize funds which will replace loan
commitments already secured from another lending agency unless approval to do so has been obtained from
that agency.  RUS and DECD, the primary two agencies with funds available  to finance drinking water
facilities in Maine, have goals similar to those of the DWSRF Program. They both consider a projects ability
to address a public health issue when prioritizing the projects eligible for their funds.

    5) Projects with funds available from another agency
         Funding from  RUS/DECD                                 15

  (Total Project Priority Point Score = a + bl + b2 + b3 + b4 + b5)

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                                       MASSACHUSETTS
Priority Ranking Criteria

Projects will be prioritized based on points accrued in the following four categories.  Projects may receive
points for all items that apply in each category. Up to 200 points can be given to any project.

•   Public Health - A maximum of 80 points may be given to projects to eliminate a serious public health risk.
    Up to 40 points may be assigned based on the severity of the problem, up to 20 points depending on the size
    of the population affected, and up to 20 points based on the extent to which the project will eliminate or
    mitigate the risk.

•   Compliance Criteria - A maximum of 60 points may be given to projects to achieve or maintain
    compliance with federal or State rules and regulations. Projects may receive up to 24 points based on the
    extent to which they are needed to ensure compliance with an existing federal or State court or
    administrative order, up to 20 points depending on the extent to which they are needed for compliance with
    federal or State permit or approval, and up to 16 points based on the extent to which it addresses  reasonably
    anticipated, additional federal or State requirements and has demonstrable benefits to or protection of
    drinking water quality or public health).

•   Affordability - Projects may receive up to 20 points based on the extent to which they will assist systems
    whose service area MHI is less than or equal to 80 percent of the State MHI for non-metropolitan areas.

    Program and Implementation - A maximum of 40 points may be given to projects to address program  and
    implementation issues (e.g., up to 16 points for projects to consolidate or restructure a PWS to address
    contamination, compliance,  or capacity problems; up to 8 points for projects to implement, or be consistent
    with, one or more current watershed management plans, etc.).

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          MASSACHUSETTS DEPARTMENT OF ENVIRONMENTAL PROTECTION
                 DRINKING WATER STATE REVOLVING FUND (DWSRF)
                     1998 /1999 PROJECT RATING SCORE SHEET
PWS Name:
PWS City or Town:
Watershed:
Region:
PWS ID #:
Project No.:
Reviewer:
                                                   Total Project Score (from page 2):
A. Public Health Criteria [See 310 CMR 45.06(a).] 40% of the weight (80 points) will be on public
health criteria.
Criterion/Factor
1. The extent to which the project will eliminate or mitigate a serious risk to public health:
a. The severity of the public health problem(s) the project is intended to address.
b. The size of the population affected by the identified risk(s) to public health.
c. The extent to which the project demonstrably eliminates or mitigates the identified serious
risk(s) to public health.
TOTAL
Points
Avail.

40
20
20
80
Score





B. Compliance Criteria [See 310 CMR 45.06(b).] 30% of the weight (60 points) will be on compliance
criteria.
Criterion/Factor
1. The extent to which the project is needed to achieve or maintain compliance with 310 CMR
22.00, the SDWA or other required or related federal and/or state permit(s), approvals,
regulations and requirements, and the effect of compliance on public health and drinking water
quality.
a. The extent to which the project is needed to ensure compliance with an existing federal or state court
or administrative order.
b. The extent to which the project is needed to come into or maintain compliance with 3 10 CMR 22.00,
the SWDA, or other required or related federal or state permit or approval, including the Department's
approval of a new drinking water source.
c. The extent to which the project is to address reasonably anticipated, additional federal or state
requirements and has demonstrable benefits to or protection of drinking water quality and/or public
health.
TOTAL
Points
Avail.

24
20
16
60
Score






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C. Affordability Criteria [See 310 CMR 45.06(c).] 10% of the weight (20 points) will be on
affordability criteria.
Criterion
1. The extent to which the
median household income
metropolitan areas.
project will assist
("MHI") of 80%
systems whose service area consists of users with
or less of the state median household income for non-
TOTAL
Points
Avail.
20
20
Score


D. Program and Implementation Criteria [See 310 CMR 45.06(d).] 20% of the weight (40 points) will
be on program and implementation criteria.
Criterion
1. Whether the project is to consolidate and/or restructure a public water system (e.g., to address
a system with a contaminated water supply or when a system is in noncompliance or lacks
adequate technical, managerial and financial capability to maintain compliance).
2. The extent to which the project implements or is consistent with one or more current
watershed management plans (e.g., DEP basin plans) and/or watershed protection plans (e.g.,
local Zone II land use controls, comprehensive conservation management plans), or otherwise
effectively addresses a watershed priority, as determined by the Department.
3. The extent to which the project is consistent with local and regional growth and/or
infrastructure plans, and promotes the rehabilitation and revitalization of infrastructure,
structures, sites, and areas previously developed and still suitable for economic (re)use, as
provided in Executive Order 385 (Growth Planning).
4. Whether the project constitutes or is a component of a multi-community or regional approach
to addressing the identified public health or drinking water quality problem.
TOTAL
Points
Avail.
16
8
8
8
40
Score





                                                             TOTAL PROJECT SCORE:
                      There are a total of 200 available project score points.

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                                        NEW HAMPSHIRE
Priority Ranking Criteria

Projects will be prioritized based on points accrued in the following five categories:

•   Violations of National Drinking Water Standards - Projects for systems with water quality issues may
    receive points for all criteria that apply in this category. Points may be given to a project for each of the
    following: total and fecal coliform; nitrate; turbidity; THMs; lead and copper; primary organic, inorganic,
    and radionuclide standards; secondary standards; and boil status.  For example, 62 points will be given to
    projects addressing boil status classification, and 18 points to projects addressing copper level between 1.3
    and 3.0 mg/1.

•   Quantity Deficiencies or Insufficient Storage - Points will be given based on water quantity deficiencies
    (shortages due to limited water supply sources or insufficient storage to meet public need).  For example, the
    maximum, 22 points will be given to systems for continual daily shortages while 14 points will be given  to
    systems for shortages during seasonal high use in  a system without an implemented conservation plan.

•   Treatment/Design Deficiencies - Points will be given based on design deficiencies (conditions that could
    be corrected by enlarging, repairing, installing, or replacing all or a portion of the system).  For example, 22
    points will be given to systems that have no surface water filtration or that have GWUDI, while as few as 16
    points will be given for other significant deficiencies.

•   Affordability - Points will be given to  each project if the proposed user rate is greater than  1 percent of the
    system's or town's MHI.  The least affordable projects (Affordability index greater than 2.5) will receive the
    maximum of 15 points.

•   Bonus Points - Projects may receive bonus points for all items that apply (a total of up to 28 points). Bonus
    points may be given for consolidation (10  points)  and to systems that have implemented source water
    protection (5 to 10 points), water conservation (1 to 4 points), backflow prevention (2 points), and
    emergency plans (2 points).

Notes

•   Tie-Breaking Procedure - In the event of a tie, the project that serves the greater existing population will
    receive the higher ranking.

•   Consolidation - For consolidation projects, points may be awarded for the relief of problems in the satellite
    system(s).

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                                   NEW HAMPSHIRE

6A(1) Priority Ranking-Formula

In order to direct the resources of New Hampshire's DWSRF toward the state's most pressing public health
and compliance needs, and address affordability, projects win be rated using a point system and placed on a
priority list.  Project priority points (P) will be derived using the following formula:

P= [(A+B +C+D) + bonus points]

Where:
        A   Violations of National Drinking Water Standards
        B   Quantity Deficiencies
        C   Treatment/Design Deficiencies
        D   Affordability of project
        Bonus points may be given for specific actions taken by systems to maximize
        public health protection. (Discussion at end of 6A(2).)

6A(2) Description of Factors

Factors used in the formula are described and weighted below.  Factors and points apply to the system
applying for assistance. For consolidation projects, points can be awarded for the relief of problems in the
satellite system(s).  For planning projects, points can be awarded based upon the project likely to result
from the planning activities.

A = Violations of National Drinking Water Standards

Maximum Contaminant Levels (MCLs) are established by the SDWA for those contaminants which may
be detrimental to public health. Exceedences of these levels in the 12 months preceding the development of
a priority list (3 years for secondary contaminants) carry the following weightings.  Points are given for all
of the following that apply to a system.

                                                                          Priority points
        a. Total and fecal -coliforms
               1. No MCL violations                                              0
               2.  1-2 MCL violations                                              30
               3. Greater than 2 violations                                         40
        b. Nitrate
               1. No level above 1.0 mg/L                                         0
               2. Levels >1.0<10mg/L                                             24
               3. MCL violations                                                  36
        c. Turbidity
               1. No MCL violations                                              0
               2.  1-2 MCL violations                                              26
               3. Greater than 2 violations                                         36

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        d. THMs
               1. No MCL violations                                               0
               2.  1-2 MCL violations                                               26
               3. Greater than 2 violations                                          36

        e. Lead and Copper (At the 90th percentile)
               1. Lead levels above .030 mg/L                                       28
               2. Lead levels between  .015 and .030 mg/L                            22
               3. Copper levels above  3.0 mg/L                                     24
               4. Copper levels between  1.3 and 3.0 mg/L                            18

        f. Primary Organic, Inorganic, and Radionuclide Standards

               1. No MCL violations                                               0
               2.  1-2 MCL violations                                               18 per
                                                                           contaminate group
               3. Greater than 2 violations                                          20 per
                                                                           contaminate group

               ** Multiply number of MCL violations by the number of contaminant groups present.

        g. Secondary Standards
                       Any exceedence  of SMCL                                    14

        h. Boil Status (non-catastrophic i.e. fecal coliform positive)                      62

B = Quantity Deficiencies or Insufficient Storage. Quantity deficiencies are shortages due to limited
water supply sources or insufficient storage within the  distribution to meet public need. The associated
public health and compliance risks associated with quantity deficiencies include domestic need of adequate
potable water for drinking and hygiene, and maintaining adequate pressure in lines to prevent back
siphonage and cross-connections.  Projects related to anticipation of future growth are not eligible for
funding under the DWSRF, therefore, projected shortages due to anticipated expansion are not eligible and
should not be ranked under this category.

        Condition                                                          Priority points

        Adequate quantity for the present (meets all current demand)                    0
        Continual shortage (daily)                                                   22
        Shortage during peak demands                                               20
        Shortage during seasonal high use in a system with an
        implemented conservation plan.                                             18
        Shortage during seasonal high use in a system without
        an implemented conservation plan                                           14

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C = Treatment/Design Deficiencies: Design deficiencies are those which could be corrected by
enlargement, repair, installation or replacement of all or a portion of the system. Any combination of the
following deficiencies have the potential to adversely affect a system's ability to continually provide
drinking water that meets all standards.

        Condition                                                          Priority points

        No surface water filtration or presence of groundwater under
        the influence of surface water                                             22
        Non-optimized surface water filtration when compared
        with AWWA composite correction criteria                                  18
        Mandated chlorination of groundwater system                               14
        Distribution/ plant capacity deficiencies
        (includes situations where current demand exceeds treatment
        capacity; pipe tuberculation; pressure issues; asbestos cement removal)       18
        Need to upgrade existing corrosion control
        treatment in order to meet action levels                                     17
        Improper well construction                                                18
        Inadequate water treatment wastewater disposal
        (backwash or sludge)                                                     16
        Other significant deficiencies (e.g. treatment of arsenic, iron, manganese,
        radon, radionuclides; other deficiencies observed during a sanitary survey).     16

D Affordability: In order to  address affordability on a per household basis, ranking points will be awarded
to any system whose proposed project user rate exceeds the state's definition of affordability found in
Section 9. An affordable project is one that results in user rates that do not exceed 1 percent of the
system's or town's median household income.  Points will be  awarded using the following system:

Affordability Index* (resulting project                           Priority  Points Awarded
user rate / 1% of system or community MHI)

1.0-1.5                                                                  12
1.5-2.0                                                                  13
2.0-2.5                                                                  14
>2.5                                                                    15

Bonus points: In order to reward systems that operate in a manner that maximizes their efforts to protect
public health and maintain compliance, bonus points may be awarded for a project in addition to the points
that reflect public health and  compliance need. The following points may be added to an applicant's score
when they apply:

Consolidation: Projects which result in the consolidation, interconnection, and regulatory compliance for 2
or more drinking water systems may receive an additional 10 points applied to their total score.

Source Water Protection:
Drinking water systems which have implemented a comprehensive source water protection plan including
permanent protection of existing lands may receive 10 points applied to their total score. Systems in the
process or committed to implementing a source water protection program  (via contract) may receive 5
points applied to their total score.

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Conservation:
Drinking water systems that have taken measures to implement water conservation measures may add the
following bonus points where they apply:

Master and customer meters with a meter reading, replacement and maintenance program         1
Rate structure that promotes conservation Implemented water conservation strategy               1
Unaccounted for water loss of 15% or less                                                    1

Backflow Prevention:
Systems that have a residential, commercial and industrial backflow prevention program may receive 2
bonus points added to their score.

Emergency Plans:
 Systems having an updated emergency plan may receive 2 bonus points added to their score.  An
acceptable emergency plan must meet the criteria in NH rules (Part Env-WS 365 - Emergency Plans)
which require a phone list of contacts and a strategy for contingency  supplies in the event of an
unanticipated interruption/ disruption of service.

6A(3). Tie-breaking procedure:
When two or more projects score equally under the Project Priority System a tie breaking procedure will be
utilized.  In order to direct financial resources where they will benefit the greatest number of people, and
because the vast majority of New Hampshire's systems are either small or very small, (statewide, only 5
systems serve greater than 10,000 people) the project with the greatest existing population served will
receive the higher ranking).

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                                         RHODE ISLAND
Priority Ranking Criteria

Projects will be prioritized based on points accrued in the five categories below and the incentive point under
Notes.  Points will only be given for one item in each category (i.e., scores are not cumulative within each
category).

•   Health Risk and Compliance - Points will be given to projects that address water quality and
    contamination issues.  Projects addressing treatment technique violations or exceedances of MCLs, State
    MCLs, or health advisories may receive up to 50 points.  Projects needed for compliance with future SDWA
    regulations may receive up to 8 points. Thirty-five points may be given to projects  extending service to
    people with contaminated private wells, and up to 21 points may be received by projects to upgrade or
    replace infrastructure.

•   Affordability - Points will be given to projects based on the percentage of the MHI that goes to the average
    annual residential water bill.  The maximum number of points will be given to systems where greater than
    1.5 percent of the MHI goes to residential water bills.

•   Capacity Development - Five points will be given to projects that involve the consolidation of two public
    water systems if one system lacks the proper technical, managerial, or financial capacity to maintain
    compliance with the SDWA. The result of the consolidation must ensure compliance with the SDWA.

•   System  Type - Points will be assigned based on the type of system for which the project is designed. CWSs
    will receive 5 points, NTNCWSs will receive 3 points, and TNCWSs will receive 1 point.

Notes

•   Incentives - One point will be given for systems that have no monitoring violations over the last 24 months.

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                              STATE OF RHODE ISLAND
                         Drinking Water State Revolving Fund
                                   Project Priority Ranking

Total Project Priority Ranking Score A + B + C + D + E

 A. Health Risk and Compliance (select no more than one from Section A)
 Points
     1)  Project is to address a Treatment Technique Violation or the exceedence of an
        MCL, SMCL or a Health Advisory during the 18 months preceeding the
        development of the Project Priority List.

        a) Microbiological
            i. Surface Water Treatment Rule
                (a) Filter Performance Criteria (NTU Compliance)                                50
                (b) CT Disinfection                                                           40
            ii.  Total Coliform Rule
                (a) Acute MCL Violation (Fecal/E-coli violation)                                 60
                (b) Non-Acute MCL Violation (Total Monthly Coliform Violation)                  45
        b) Inorganic Chemicals
            i. Nitrates                                                                       53
            ii.  Lead and Copper                                                              37
            iii. Other Primary Standards                                                       35
        c) Organic Chemicals                                                                 35
        d) Radiologicals                                                                      33
        e) Secondary Standards (Aesthetics)                                                    4

     2)  Projects for compliance with future SDWA regulations:
        a) Enhanced Surface Water Treatment                                                  8
        b) Ground Water Disinfection                                                         7
        c) Disinfection By-Products                                                            6
        d) Arsenic                                                                           5
        e) Radon                                                                            5

     3)  Project is to extend the water lines of an existing system to an area where there               35
        is a public health threat due to contaminated private drinking water wells.

     4)  Projects to upgrade, replace or repair infrastructure which is at risk of causing
        contamination due to age or design deficiencies.

        a) Source (excluding reservoirs, dams, dam rehabilitation and water rights)                  21
        b) Treatment                                                                         19
        c) Source-intake structure                                                             16
        d) Pump Station                                                                      14
        e) Storage                                                                           12
        f) Transmission/Distribution mains                                                     10
        g) Instrumentation/Controls                                                            8

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B. Economic Factors

    1) *Percentage of average annual residential water bill to median household income.
         a) Greater than 1.5 %                                                             3
         b)   1.25% to 1.49%                                                            10
         c)   1.00% to 1.24%                                                             7
         d)   0.75% to 0.99%                                                             4
         e)   0.50% to 0.74%                                                             2
         f)   0.25 % to 0.49 %                                                             1

C. Capacity Development

    1)   Project involves the consolidation of two public water system, one of which              5
        lacks either the proper technical, managerial, or financial capacity to maintain
        compliance with the Safe Drinking Water Act. The result of the consolidation
        must ensure compliance with the SDWA.

D.  Special Incentives

    1)   No monitoring violations over the last 24 months                                     1

E.  System Type

    1)   Community                                                                       5
    2)   Non-transient non-community                                                      3
    3)   Transient non-community                                                          1

*The average annual  residential water bill is to be based on 70,000 gallons of water per year. The MHI of
the community in which the water service area is located will be determined from income data in the most
recent United States census. If there is reason to believe that the census data is not an accurate
representation of the MHI within the area to be served, the reasons will be documented and the applicant
will furnish additional information regarding the MHI. Information will consist of reliable data from-local,
regional, state or from an income survey conducted by a reliable impartial source.

MHIs for service areas which cross municipal boundaries is the weighted average based on the number of
services in each community.

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                                             VERMONT
Priority Ranking Criteria

Projects will be prioritized based on points accrued in the following five categories:

•   Water Quality Deficiencies - Projects that seek to addresses violations of national drinking water standards
    will receive points for all items that apply in this category.  They will receive one point value for each of the
    following contaminants: bacteriological (5-25 points); nitrate (5-25 points); turbidity (5-10 points); primary
    inorganic, organic, and radiological standards (15-25 points); secondary inorganic/physical/chemical
    standards (3 points); do not drink orders (25-50 points); and compliance/enforcement orders (10 points).
    Projects will receive points only for concerns that will be addressed by the proposed improvements.

•   System Facility Improvements - Projects may receive points for all deficiencies that will be corrected by
    the proposed project, such as new supply source/replacement of source to address a public health hazard (50
    points), treatment for surface water filtration or ground water under the direct influence of surface water (45
    points), etc.

•   System Reliability Criteria - Projects designed to improve the reliability and efficiency of a system may
    receive points for all criteria that apply in this category. For example, systems with redundancy of critical
    components and consolidation or interconnection projects that will eliminate significant capacity problems
    will receive 15 points. (With the exception of consolidation projects, projects that received points  for an
    improvement under the previous category are not eligible to receive points for the same reason in this
    category.)

•   Population -  Points will be given to projects based on population criteria. The smallest systems (serving 25
    to 500 people) will receive the maximum score in this category, 10 points. Point values decrease as system
    size increases.

•   Affordability - Points will be given to systems based on the ratio of system MHI to State MHI, with the
    maximum number of points given to projects in communities determined to be most in need i.e.  (system
    MHI) State MHI) x 100 is < 120.  Systems may receive up to 35 points.

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                                         VERMONT
V. Priority Ranking System
The State of Vermont will use a point system to prioritize the order in which eligible water supply
projects will be financed. To be eligible, projects must maintain or facilitate compliance with the drinking
water regulations or further the protection of public health. The projects must also be needed and the
proposed type, size and estimated cost of the project must be suitable for its intended purpose.
Additionally, the water system must have or will have the technical, financial and managerial ability to
operate the system in compliance with federal and state law, and the system must not or will not be in
significant noncompliance with the regulations.

Priority in funding will be given 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 (SDWA)  and the
Vermont Water Supply Rule (WSR), and assist systems most in need according to State affordability
criteria. Examples of projects that might meet these goals include repairing or replacing aged
infrastructure (e.g., install or replace/upgrade treatment, storage, or transmission facilities), water system
restructuring such as consolidation of systems, or management changes to ensure technical, managerial,
and financial capabilities of the water utility. Projects not eligible include operation and maintenance
costs, future growth, fire protection, and laboratory fees for monitoring. Separate priority lists will be
maintained for each of the loan types.

Municipal projects to purchase land or conservation easements for the purpose of protecting public
drinking water supplies and planning projects are also prioritized using this system.

        A. Priority Ranking System Scoring Criteria

        The priority ranking system scores projects based on information submitted by
        water systems and from information in the WSD files. The numerical scores in the
        DWSRF priority ranking system are based on technical and non-technical criteria.

        The technical criteria are:

        1. Water Quality Deficiencies (MCL/treatment technique violations);
        2. System Facility Improvements to Correct Deficiencies (violation of WSR
          system design, construction and protection standards);
        3. System Reliability Criteria; and
        4. Source Protection (Land Purchase or Conservation Easement Projects only).

        The non- technical criteria are:

        5. Population; and
        6. Financial Need/Affordability.

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Priority points assigned to projects are computed in the manner described below. Projects determined by
the Secretary to require multi-year funding and planning projects are awarded points for the entire project.

               1. Water Quality Deficiencies: Violations of Federal drinking water standards.

               Points below shall be based upon water system performance for the 24-month period
               preceding development of the priority list. Points for items a. through f will only be
               awarded if the proposed water system improvements or land purchase or easements
               address the water quality concerns. For example, a water system with a nitrate problem
               will not be given the nitrate points for a water storage project.

                       a. Bacteriological
                           i. 1 - 2 MCL Violations 5 pts
                           ii.  Greater than 2 MCL Violations 15 pts
                           iii. Permanent Boil Status 25 pts

               Points will only be awarded for one (1) of the three (3) categories; for
               example, a water system on permanent boil due to repeated MCL violations would
               only receive points for being on permanent boil.

                       b. Nitrate
                           i. Levels above 1.0 mg/L but below MCL - 5 pts
                           ii.  MCL Violations - 25 pts

                      c. Turbidity
                           i. 1-2 MCL Violations - 5 pts
                           ii.  Greater than 2 MCL Violations - 10 pts

                      d. Primary Inorganic, Organic, and Radiological  Standards
                           i. 1-2 MCL Violation(s) - 15 pts
                           ii.  Greater than 2 MCL Violations - 25 pts

                      e. Secondary Inorganic, Physical, Chemical Standards
                           1 or more MCL Violation(s) - 3 pts

                      f. Do Not Drink Order
                           i. Non-MCL - 25 pts
                           ii.  MCL - 50 pts

                      g. System is Under a Compliance/Enforcement Order: e.g., Compliance
                      Schedule, Assurance of Discontinuance, Special  Sampling Requirement, etc. -
                      10 pts

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2. System Facility Deficiencies: Improvement projects (i.e., rehabilitation or replacement
of facilities) to correct system integrity and capacity deficiencies.

The points assigned to each required improvement reflect the relative public health risk
and compliance concern of the deficiency being corrected. In order to receive points, the
proposed project must correct the deficiency.

        a. Contaminated source - Develop a new supply source; water quality indicates a
        public health hazard or significant public health risk requiring replacement of
        source - 50 pts

        b. Lack of approved source capacity
             i. Water shortage requiring new source - 35 pts
             ii. Documentation of capacity of permanent source or major equipment
             improvements to meet demand - 15 pts

        c. Inadequate source construction - 5 pts

        d. Vulnerable to potential sources of contamination (improvements could
        include abandonment or source replacement) - 20 pts

        e. No treatment for surface water filtration or groundwater under the direct
        influence of surface water - 45 pts

        f Inadequate filtration performance - 10 pts

        g. Inadequate water treatment backwash disposal - 5 pts

        h. Inadequate disinfection - 20 pts

        i. Other inadequate treatment techniques or processes
             i. Fe/Mn and other secondary non-acute contaminants - 5 pts
             ii. Corrosion control for lead or other acute contaminants - 35 pts
             iii. Chronic contaminants such as certain metals (cadmium) or organic
             constituents - 30 pts

        j. Inadequate finished storage capacity - 10 pts

        k. Inadequate finished storage construction - 5 pts

        1. Low system pressure (improvements could include storage, pump station,
        larger mains) - 25 pts

        m. Inadequate pumping station (hydro-pneumatic system including old or
        undersized tanks or pumps) - 10 pts

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       n. Inadequate transmission main system - 10 pts

       o. Inadequate distribution system - 5 pts

       p. Inadequate cross-connection control -  10 pts

       q. Other- 10 pts

3. System Reliability Criteria: Improvement Projects To Improve the Reliability
and Efficiency of the Water System. Projects awarded points for deficiencies
under Section 2 above are not eligible for points under this section for the
same improvement except for Items c. and d. below.

       a. Redundancy of critical components (pumps, valves, sources, disinfection
       equipment, etc.) - 15 pts

       b. Control/automation for operational efficiency (computerization; install
       testing equipment, control valves, monitoring  or metering equipment;
       laboratory upgrading) - 5 pts

       c. Consolidation or interconnection of two or more drinking water systems -
       15 pts

       d. System consolidation or interconnection will eliminate significant
       capacity problem - 15 pts

4. Source Protection - Land Purchase or Conservation  Easement Projects (only):
Sources must have an approved hydrologically delineated Source Protection Area
and an approved Source Protection Plan prior to loan approval.

       a. Land Location points are not additive. Points for highest applicable
       improvement are counted.)
            i. Project achieves Isolation Zone Control - 40 pts
            ii. Project achieves Primary Recharge Zone Control - 10 pts

       b. Potential Sources of Contamination (PSOCs) addressed. Points are not
       additive; Points for highest applicable improvement are counted.
            i. Project addresses Microbiological PSOCs - 20 pts
            ii. Project addresses Nitrate PSOCs - 15 pts
            iii. Project addresses Primary Inorganic or Organic PSOCs - 10 pts

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 5. Population Criteria:
 Priority points will be assigned to the system based on
 population.  Small systems are generally at a disadvantage because of economies
 of scale (affects ability to do physical improvements, improve system capacity,
 etc.); the points assigned for this factor will give minimal priority to these
 systems.

 Population	Priority Points
 25-500                      10
 501-3,500                   5
 3500 - 10,000                 2
 > 10,000                      1

 6. Affordability
 Affordability only considers income because it is the most fundamental predictor
 of a household's ability to pay and which is represented by the median community
 household income statistic.  Affordability is based on a comparison of state
 community median household income (SCMI) to the median household income (MHI) of
 the water system or of the town(s)  in which the system exists. The SCMI figure
 is $27,690 based on the 1990 census. For water systems which encompass more than
 one town, the MHI will be based on the weighted number of household connections
 in each town(s) if the MHI is to be based on town figures. The formula for
 affordability involves first dividing the  community or water system MHI  by the
 SCMI ($27,690),  and then multiplying this figure by one  hundred (100) to yield a
 percentage. Different percentage brackets are then assigned points.

 Formula:  (Community MHI - SCMI) x 100 = X
 X < 6035 Points	

60 X < 70      25 Points
70X<80      15 Points
80X<90      10 Points
90X<100     5 Points
100X<120    2 Points
X 120         0 Points

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B. Refinancing of Existing Facilities

The DWSRF construction loan program may be used to buy or refinance municipal
debt including all obligations for DWSRF eligible projects. Under federal law,
privately owned systems (both profit and nonprofit) are not eligible for
refinancing. The long-term debt must have been incurred and construction must
have started after July 1, 1993 to be eligible for refinancing. The use of DWSRF
funds are intended to be first directed at proposed projects that address
ongoing compliance problems or public health risks.
State legislation allows for loans to systems that incurred debt and initiated
construction after April 5, 1997 at interest rates and terms comparable to those
for new projects. Projects that meet this criterion will receive  priority
ranking using the procedure described for new projects for the next two annual
priority lists compiled following the initiation of construction. All other
applications to refinance existing debt will be considered only after all new
construction projects have been funded and if there are still funds available.

C. Construction Loan Fund Priority List

The fund provides construction loans to municipalities and certain
privately-owned water systems for planning, design, construction, repairing or
improving public water systems to comply with State and Federal standards and
protect public health.  The projects that are ready to proceed in the Federal
fiscal year October 1 - September 30 are assigned points in accordance with the
Priority Ranking system scoring criteria. Project funding is based on priority
score  and the following considerations:

       1. Tie Breaking Procedure
       When two or more projects score equally under the project priority system, the
       higher total score under technical criteria will be used as a tie breaker.

       2. Amendments
       The state revolving fund priority list may be amended twice a year to consider
       updated or new information from water systems that have already been identified
       and ranked through the priority system public participation process and are
       listed on the  Comprehensive Project Priority List.  Amendments to the priority
       list will only affect the ranking of eligible projects; projects will not be
       removed from the Anticipated Loan Recipient category.

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                                           NEW JERSEY
Priority Ranking Criteria

Projects will be prioritized based on points accrued in the four categories. To be eligible for funding, projects
must receive points from the Compliance and Public Health Criteria category.

•   Compliance and Public Health Criteria - Projects to address contamination problems and ensure
    compliance with SDWA requirements will receive up to 500 points for 1 of the 16 criteria in this category
    (e.g., systems using surface water that are not in compliance or have had acute violations and have been
    issued an administrative order will receive 500 points; projects to redevelop or construct wells to meet New
    Jersey requirements will receive 15 points).  If the project addresses more than 1 item, it will be divided into
    various projects. Points will be assigned in this category only if the project actually repairs, rehabilitates, or
    corrects a problem.

•   Approved Drinking Water Infrastructure Plan - Projects that use comprehensive planning and regional
    solutions to address compliance problems will receive points as  an incentive for cost-effective
    improvements.  Projects for systems that connect to a regional system within a comprehensive water supply
    plan that is acceptable to NJ DEP will receive 50 points. Projects for  systems that have local 5-year master
    plans or capital  improvement plans will receive 25 points.

•   State Development and Redevelopment  Plan - Projects in municipalities that have been approved by the
    State Planning Commission under the Center Designation Process and projects in distressed communities
    will receive up to 20 points. For example, projects for distressed areas that have an endorsed Strategic
    Revitalization Plan will receive 20 points,  while urban centers will receive 10 points.

•   Affordability -  Projects for systems that serve municipalities with an  MHI lower than the State MHI will
    receive between 10 and 70 points.  The maximum will be given  to projects for systems where the municipal
    MHI is less than or equal to 40 percent of the State MHI.
Notes
    Tie-Breaking Procedure - In the event of a tie, projects will receive points based on the population of the
    water system service area.  The system that serves the larger permanent population will prevail.  If systems
    are still tied, the system that serves the greater proportionate (taking into account transient populations)
    population in its service area will be given higher priority.

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                                        NEW JERSEY
                                   PRIORITY SYSTEM
II. Ranking Methodology
NJDEP will rank all eligible projects according to the total number of points each project receives and will
subsequently place the projects on the Project Priority List according to their ranking. The projects with the
higher number of points rank above those with lesser points.  Due to annual addition of new projects to the
Project Priority List, or to periodic revisions to the Priority System, individual project rankings may change
annually. For projects which include multiple elements as listed in priority Category A below, projects will be
separately listed by the elements involved, and priority points will be assigned for each element.

Priority points will be assigned only if the project scope includes actual repair, rehabilitation, correction of a
problem or improvement clearly related to priority Category A. A project must be assigned points from Category
A to be eligible for ranking, points assigned from the remaining categories are in addition to the points received
in Category A.

The prospective applicant must notify NJDEP of any changes to project scope or any other circumstance which
may affect the  calculation of priority points. NJDEP shall then recalculate, if appropriate, the prospective
applicant's ranking utilizing the new information submitted and revise the priority ranking accordingly.

The principal elements  of the Priority System are: A) Compliance and Public Health Criteria, B) Approved
Drinking Water Infrastructure Plan, C) Conformance with the New Jersey State Development and Redevelopment
Plan, D) Affordability and E) Population. Points are assigned for each of the five priority  categories discussed
below, as applicable:

        A. Compliance with Safe Drinking Water Act (SOWA) and Protection of Public Health

        DWSRF funds are to be utilized to address contamination problems  and to ensure compliance with the
        SDWA requirements.  Priority is given to water systems in non-compliance with the surface water
        treatment requirements and those incurring acute, primary or action level violations as defined in the
        SDWA, and the NJSDWA rules (N.J.A.C. 7:10).  Table 1 describes the sixteen project elements that are
        eligible for DWSRF funds:

                                                      Table  1

               1. Systems which utilize surface water, that are not in compliance
                 with the surface water treatment requirements or have had any
                 acute violations  (either fecal coliform or nitrates) and have been
                 issued an administrative order, directive or recommendation
                 by NJDEP requiring the correction of any noncompliance of its
                 treatment facilities to address an immediate public health threat        500 pts

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2. Systems which utilize groundwater under the direct influence
  of surface water, that are not in compliance with the surface water
  treatment requirements or have had any acute violations (either fecal
  coliform or nitrates) and have been issued an administrative order,
  directive or recommendation by NJDEP requiring the correction of
  any noncompliance of its treatment facilities to address an immediate
  public health threat                                                         350 pts

3. Systems which utilize groundwater that have had any acute
  violation (either fecal coliform or nitrates)                                     300 pts

4. Systems which have had any maximum contaminant level
  violations (except acute violations) or exceedance of action levels
  (lead and copper rule)                                                       200 pts

5.  Systems that have lost well capacity due to cutbacks in Critical Area #1
   or 2 or due to saltwater intrusion and a solution is needed to preserve
   the aquifer as a viable aquifer                                               175 pts

6.  Purchase of a water system to comply with the SDWA for
  capacity development                                                       150 pts

7.  Extension of water mains to private wells that have had any maximum
   contaminant level violations or  exceeded lead and copper action levels  125 pts

8. Existing treatment facilities that need to be rehabilitated, replaced
  or repaired to ensure compliance with the SDWA                               100 pts

9. Existing transmission or distribution mains with appurtenances
  that need to be rehabilitated, replaced, repaired or looped to pre-
  vent contamination caused by leaks or breaks in the pipe or improve
  water pressures to maintain safe levels or to ensure compliance
  with the SDWA                                                            75 pts

10. Existing pump stations or finished water storage facilities that
   need to be rehabilitated or replaced to maintain compliance
   with the SDWA                                                           60 pts

11. New finished water storage facilities or pump stations that are
   needed to maintain pressure in the system and/or prevent
   contamination                                                             50 pts

12. Systems which have had any exceedance of any secondary drinking
   water regulations that have received notification issued by NJDEP
   that exceedance  of a secondary drinking water regulation causes
   adverse effects on the public welfare, and for which the system has
   received a directive issued by the NJDEP requiring correction of the
   exceedance
                                                                             45 pts

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        13. Construction of new or rehabilitation of existing interconnections
           between water systems to improve water pressures to maintain
           safe levels or to ensure compliance with the SDWA                           30 pts

        14. Replacement or installation of new water meters                             25 pts

        15. Redevelop wells or construct new wells to meet the New Jersey
           SDWA rules for required pumping capacity                                 15 pts

        16. Other project elements, not including items 1 through 15 above, that
           ensure compliance with the SDWA and protect public health, as
           approved by NJDEP                                                     1 pt
B. Approved Drinking Water Infrastructure Plan

Planning water system improvements that advance comprehensive water supply concepts can facilitate
cost effective drinking water system improvements. To provide an incentive to plan in this way, priority
points will be given to each project that implements the actual repair, rehabilitation, correction of a
problem, or improvement clearly identified in a five year master plan or five year capital improvement
plan acceptable to NJDEP, or that is linked to a comprehensive water supply plan for a particular region
or watershed acceptable to NJDEP. Points are assigned as follows:

        1. 50 priority points will be assigned to a water system that connects to a regional solution that
        is contained in  a  comprehensive water supply plan for a particular region or watershed
        acceptable to NJDEP.

        2. 25 priority points will be assigned to a water system that has a local five year master plan
        or five year capital improvement plan, or that is linked to a comprehensive water supply plan
        for a particular region or watershed acceptable to NJDEP. The plan should contain a description
        of the components of the system, population growth estimates, testing done, current deficiencies,
        immediate recommendations, recommendations for the next five years and a map of the
        distribution system.

C. State Development and Redevelopment Plan

NJDEP  seeks to coordinate and enhance the State Planning Commission's (SPC) efforts to implement
the State Development and Redevelopment Plan.  NJDEP assigns points to projects in municipalities the
SPC has approved under the Center Designation Process. Points  are also given to distressed areas.
Points are assigned as  shown in Table 2.

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                                              Table 2

        1. Distressed areas that have an endorsed Strategic
          Revitalization Plan                                          20 pts

        2. Urban Centers                                              10 pts

        3. Regional Centers                                           5 pts

        4. Towns                                                     3 pts

        5. Villages                                                   2 pts

        6. Hamlets                                                   1 pt

Contact the N.J. Office of State Planning, Department of Community Affairs, 33 West State Street, 4th
floor, P.O. Box 204, Trenton, N.J. 08625-0204 or call (609) 292-7156  for further information on the
State Development and Redevelopment Plan.

Please note for water systems that service more than one municipality, the municipality that has the
highest population will be counted for this category.

D. Affordability

The purpose of the affordability criteria is to determine which project sponsors' water systems are
eligible for additional points under the Affordability Category.

Affordability is the degree of need for financial assistance based upon the New Jersey median household
income compared to the municipal median household income (MHI). Affordability is determined by the
following formula:


Municipal MHI  x 100  =  Affordability Factor
Statewide MHI

Points are assigned as follows:

        1. Affordability factor of 100 or greater                         0 pts

        2. Affordability factor from 85 through 99                       15 pts

        3. Affordability factor from 66 through 84                       30 pts

        4. Affordability factor less than or equal to 65                    80 pts

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        The median household income of the municipality which the water system serves and the Statewide
        median household income will be determined from income data in the most recent United States census.

        The NJDEP has determined that for the purposes of the DWSRF Program, a municipality whose median
        household income  is 35% or more below the State's MHI, shall be considered a Disadvantaged
        Community, and will receive 80 priority points,  which are proportionately greater than the other
        affordability factor points.  (New Jersey's MHI is $40,927 from the 1990 Census.)

        A weighted MHI will be calculated for a project sponsor whose water system serves more than one
        municipality, as shown in the example below.
Example
Municipalities
served
Lancaster
Mayberry
Holmeville
MHI
30,000
20,000
25,000
Population
served
5,000
10,000
15,000
Fraction of total
population served
.167
.333
.500
Weighted
municipal MHI
5,000
6,660
12,500
 Total                                   30,000              1.00                24,160

        Population served for resort communities will be calculated by the following equation:

                 (2x Winter Population) + Summer Population   =  Avg. Population
                                        3

        Please note for water systems that service more than ten municipalities, the ten municipalities that have
        the highest populations served will be considered in the above table for the affordability factor.

        The revisions to Categories C and D  in this IUP will cause a recalculation of priority points assigned
        to the projects included on the comprehensive Project Priority List.

        E. Population

        As a tie breaker, projects will be assigned points based on the permanent population of the water system
        service area. In the instance of a resort community where the summer and winter populations vary
        greatly, the permanent population will be calculated by taking the sum of twice the winter population and
        once the summer population and dividing by three.  For water systems that service more than one
        municipality, total all the permanent population served in the multiple service areas. Priority points will
        be calculated as the permanent population served by the water system divided by 100,000, expressed as
        a decimal.  In the event that projects remain tied, the project which serves a greater proportionate
        population in the water system's area will be given higher priority.

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                                            NEW YORK
Priority Ranking Criteria

Projects will be prioritized based on points accrued in the following five categories (three technical and two
non-technical):

Technical Categories:
•   MCL/Treatment Technique Violations - Projects may receive points for all violations that they seek to
    address. Points will be given based on the treatment of MCL exceedances or replacement with an alternate
    source of supply, and for interconnection with, or purchase from an adjacent water system(s) in lieu of
    treatment. Scores range  from 100 points (filtration problems leading to violations of the SWTR for
    microbiological contaminants) to 10 points (aesthetic problems).

•   Non-Treatment Sanitary Code Violations - Projects for systems with non-treatment Sanitary Code
    violations may receive points for all items that apply in this category. Projects will receive points  for
    addressing public health hazards associated with inadequate source capacity (50 points), inadequate
    distribution pressure (25 points), and uncovered finished water storage (25 points).

•   System  Reliability/Dependability Issues - Projects for infrastructure improvements that address system
    reliability and dependability issues will receive points for all items that apply in this category. Twenty
    points will be given to projects that involve the complete replacement or major rehabilitation of an existing
    treatment facility which has exceeded its design life, 10 points will be given to upgrade, replace, or install
    major vulnerable system components, and 5 points will be given for each additional issue addressed by the
    project (e.g., aged mains and appurtenances, asbestos main replacement, etc.).

Non-Technical Categories:
•   Government Needs - Projects that seek to address State or local government needs, policies, or
    requirements will receive points for all items that apply in this category. For example, 40 points will be
    given for the development of a water system or extension of an existing system to service contaminated or
    inadequate private wells at existing  residences, 25 points for consolidation of systems, etc.

•   Affordability - Points will be assigned to projects based on the community MHI as a percentage of the State
    MHI. The lower the community MHI, the greater the number of points received (between 0 to 25  points).

Notes

•   Funding Ceiling - A maximum of 50 percent of DWSRF resources can be received by a single applicant.

•   Tie-Breaking Procedure - In the event of a tie, the system with the higher total score for technical factors
    will receive priority.  If the projects remain tied, the system serving the larger population will be given
    preference.

•   Prior Year Funding - Projects with prior funding from long- and short-term DWSRF loans will be given
    bonus points to help ensure funding of on-going projects.

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                                         NEW YORK


I.       Priority Ranking System and Intended Use Plan

        A.     Priority Ranking System

               The purpose of the priority ranking system is to establish a list of eligible projects to be
               funded in a manner that the most serious risks to public health are given the highest priority.
                The New York State Department of Health (NYS DOH) proposes that the highest priority
               be given to acute public health risks, particularly those related to microbiological organisms.
                The next priority has been given to situations that pose chronic and longer term risks to
               consumers, such as organic chemical contamination. The scoring criteria also considers
               issues that are related to infrastructure upgrading or replacement. Consistent with these
               priorities, the numerical scores in the DWSRF priority ranking system are based on the
               following criteria:

               Technical Factors
               MCL/Treatment Technique Violations
               Other Sanitary Code Violations
               System Reliability/Dependability Issues

               Non-Technical Factors
               Governmental Needs
               Financial Needs
               The total numerical score for a project or a project segment will be the sum of the scores for
               criteria A, B, C, D and E.

        B.     Intended Use Plan

               The State will prepare a document called the Intended Use Plan (IUP) that describes how the
               State intends to use available DWSRF resources for the year to meet the objectives of the
               Safe Drinking Water Act (SOWA) and to further the goal of protecting public health.  The
               IUP will include specific detail on how the State will use all funds available. The IUP will
               also include a list of projects expected to qualify for financing within the fiscal period
               addressed by the IUP.  A project must be listed in an IUP to be eligible for financing.

II.      Project Ranking

        A.     Special Allocations and Restrictions

               The federal Safe Drinking Water Act Amendments of  (SDWA) require that, on an annual
               basis, water systems serving fewer than 10,000 persons must receive a minimum of 15% of
               the DWSRF. This minimum allocation for systems serving less than 10,000 persons will
               occur to the extent that there are a sufficient number of eligible projects to fund.

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        The SDWA also states that up to 30% of the annual DWSRF federal capitalization grant can
        be used to give loan subsidies to disadvantaged communities.

        The State of New York will impose an annual cap or ceiling of 50% of DWSRF resources
        that can be received by any single applicant.  In addition, the State may limit DWSRF
        financing to the demonstrated annual cash flow needs of any single applicant.

        The New York State Clean Water/Clean Air Bond Act of 1996 requires the development of
        a Memorandum of Understanding among the Governor and Legislative Leaders regarding
        selection of projects to be funded from the Drinking Water provisions of the Bond Act.
        Projects  identified in the Memorandum of Understanding will be incorporated into an annual
        funding list for Bond Act financing in conjunction with projects selected according to the
        Priority Ranking System.

B.      Project Ranking Categories

        Projects  will be placed in categories to allow priority ranking within a specific grouping of
        projects. Federal legislation requires that, on an annual basis, a minimum of 15% of the
        DWSRF be received by water systems serving fewer than 10,000 people. Also, water
        systems that qualify for financial hardship have special conditions that require a separate
        category for these projects. Therefore, three priority ranking categories will be created:

        1.      Category A. Water systems serving  < 10,000 people.

        2.      Category B. Water systems serving  = 10,000 people.

        3.      Category C. Water systems that have received written confirmation of qualification
               for financial hardship assistance.

C.      Description and Use of the Project Lists

        Several lists of projects will be created to organize and manage projects with different levels
        of priority and readiness. These listings will display the status of all projects in  the system
        and indicate the final list of projects that qualify for funding in the current IUP.

        1.      Multi-Year List:

               This list will contain all eligible projects for which pre-application forms have been
               submitted and reviewed.  This list will contain projects from Categories A and B.
               New projects can be added to this list on a continuous basis. Projects must be on
               the Multi-Year List to be eligible for short-term loans when short-term loans are
               made available.

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        Short-term loans for projects listed on the Multi-Year List will be limited to projects
        that have a total numerical score greater than (or equal to) the project with the
        lowest score (excluding bonus points awarded under Section II.E.2.) eligible to be
        funded from the current Project Readiness List. Applications for short-term loans,
        when available, will be approved on a first come/first served basis, up to the total
        amount reserved in the IUP for that purpose.

        NOTE: Short-term loans may not be offered in the initial years of the DWSRF
        program.

2.       Hardship List:

        This list will contain all projects with written confirmation that they qualify for
        financial hardship assistance (Category C). This written confirmation will be
        limited to projects that have a total numerical score greater than (or equal to) the
        project with the lowest score (excluding bonus points awarded under Section II.E.2.)
        eligible to be funded from the current Project Readiness List.  These projects will be
        selected from the Multi-Year List. Written qualification for financial hardship
        assistance will remain valid for two consecutive annual federal funding cycles.  If a
        project has not been selected for funding during this period, it will be removed from
        the Hardship List (and re-listed on the Multi-Year List) unless requalified for the
        Hardship List.

3.       Project Readiness List:

        This list will contain Category C projects and the projects from the Multi-Year List
        which are  anticipated to be ready for long-term financing during the effective period
        of the IUP. Applicants for these projects are  expected to apply for the funds
        projected to be available during the fiscal period addressed by the IUP. Projects
        from Categories A and B will be listed in descending order of total numerical score
        (resulting from the Priority Ranking System Scoring Criteria).

4.       Funding List:

        This list will include all projects from the Project Readiness List expected to qualify
        for long-term loans within a particular IUP. Projects will be listed according to the
        three project categories.  All Category C that are on the Project Readiness List will
        qualify for funding. Projects in Category A will then be selected from the  Project
        Readiness List in priority order to meet the 15% minimum requirement for water
        systems serving less than 10,000 people. All remaining projects on the Project
        Readiness List will be selected in priority order until the remaining annual DWSRF
        funding amount is encumbered.  The project selection is subject to Restrictions and
        Project By-pass Criteria in Sections II. A and D of this document.

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D.      Project By-pass

        Projects on the Project Readiness List can be by-passed, upon written notice, if any of the
        following occurs:

        1.      Project is withdrawn by the applicant.

        2.      Project does not meet the dates and/or conditions in the project schedule or the
               Project Financing and Loan Agreement.

        3.      The applicant has reached the 50% annual DWSRF resources cap for fundable
               projects on the Project Readiness List.

        4.      All other projects for the applicant that would exceed the 50% cap will be
               by-passed.

E.      Special Priorities

        1.      Emergencies:

               An emergency is a catastrophic situation that results in an imminent threat to public
               health. The determination of when an emergency exists will be made by the
               NYSDOH. Imminent threats to public health include situations that result in the
               unavailability of a source of potable drinking water for an extended period of time.
               Projects designed to address emergencies will receive the highest priority ranking.

        2.      Projects with Prior Funding Agreements:

               Projects with executed Project Financing and Loan Agreements for long-term and
               short-term DWSRF loans will be given significant additional bonus points when
               they are placed on the Project Readiness List.  This will help to ensure the
               availability of DWSRF financing needed for completion of on-going projects.
               Phased or segmented projects for which additional funds have been  conditionally
               committed in an executed Project Financing and Loan Agreement (PFLA) for
               long-term DWSRF financing will be listed, in descending priority score order.
               These projects will be assigned 2000 points in addition to their total project ranking
               system score.  Projects for which funds have been committed in an executed PFLA
               for short-term DWSRF financing will be listed, in descending priority score order.
               These projects will be assigned 1000 points in addition to their total project ranking
               system score.  Other projects will then be listed in descending priority score order.

F.      Tie Breaking

        In the event of a tie score for projects, the higher total score under Technical Factors
        (Criteria A, B and C) will be used as a tie breaker.  If this still results in a tie score, the size
        of the population served by the system will be used as a tie breaker.  The larger population
        will be given preference.
G.      Eligible Project Limitation

        Eligible projects are activities that address critical water system problems. NYS DOH may

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               require separation of unrelated project components into separate projects if it is necessary to
               focus on critical water system problems.  These separate projects will be scored
               independently. Projects must adequately be supported by technical documentation, data,
               reports, etc.

III.     Priority Ranking System Scoring Criteria

        The numerical scores in the DWSRF priority ranking system are based on technical and
        non-technical criteria. The technical criteria are A.) MCL/treatment technique violations; B.) Other
        sanitary code violations; and C.) system reliability and dependability issues.  The non-technical
        criteria are D.) governmental needs and E). financial needs. The total numerical score for the project
        or project segment being scored shall be the sum of the scores for criteria A, B, C, D and E. Projects
        must be adequately supported by technical documentation, data, reports, etc.

Technical Factors                                                                          Score

        A.      MCL/Treatment Technique Violations
               Points awarded are based on treatment of MCL exceedances and/or
               replacement with an alternate source of supply, and for interconnection
               with, or purchase from adjacent water system(s) in lieu of treatment
               (more than one item may apply):

               1.       Microbiological

                              a)      Surface Water Treatment Rule

                                      i.       Filtration                                     100

                                      ii.       Filtration Performance Criteria
                                              (NTU compliance)                            50

                                      iii.      CT Disinfection                               30

                              b)      E. coli                                                80

                              c)      Total Coliform                                        40

                       2.      Organics

                              Organic chemicals (POC/UOC) and
                              disinfection by-products                                       40

                       3.      Lead and Copper/Corrosion (mandated)                         30

                       4.      Radiological                                                 25

                       5.      Inorganic/Physical

                              a)      Nitrates                                              50

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                       b)      Other health-related                                   25

                       c)      Aesthetic                                             10

B.      Non-treatment Sanitary Code Violations (more than one item may apply)
        The project need must be adequately supported by technical documentation,
        data, reports, etc.

        1.      Inadequate Source Capacity (public health hazard)                       50

        2.      Inadequate Distribution Pressure (public health hazard)                   25

        3.      Uncovered Finished Water Storage (public health hazard)                 25

C.      System Reliability/Dependability Issues (more than one item may apply)
        The project need must be adequately supported by technical
        documentation, data, reports, etc.

        1.      Complete replacement or maj or rehabilitation of existing
               treatment facility for primary contaminants that has
               exceeded design life and/or  does not meet the design
               standards in the current edition of Recommended
               Standards For Water Works. In lieu of treatment,
               replacement with an alternate source of supply, and/or
               interconnection with, or purchase from, adjacent water
               system.                                                              20

        1.      Upgrade, replace and/or install major vulnerable system
               components to meet the design standards in the current edition
               Recommended Standards For Water Works. Any of the
               following apply.                                                      10

               a)      A principal component integral to an existing filtration
                       process such as sedimentation, flocculation, filtration,
                       chemical feed, or backwashing (can only receive points
                       for Criteria C.2a. or C.I.)

               b)      Pump stations

               c)      Existing wells

               d)      Existing disinfection system for a groundwater/surface
                       water supply

               e)      Transmission main

               f)      Finished water or distribution  storage

               g)      Other water treatment systems for secondary contaminants

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                       only (or replacement of source instead of treatment)

        3.      Aged mains and appurtenances                                         5

        4.      Redundancy of critical components (pumps, valves, chemical
               feed-systems, etc.)                                                    5

        5.      Asbestos main replacement                                            5

        6.      Control/automation for operational efficiency (computerization,
               control valves, metering, laboratory upgrading)                          5

        7.      Inadequate source capacity which is not a public health hazard
               (can only receive points for Criteria B1 or C7)                           5

Non-Technical Factors:

D.      Governmental Needs (more than one may apply)

        Additional points will be assigned to a project on the basis of
        state or local government needs, policies, and/or requirements.

        1.      Development of a water system or extending existing
               system to service contaminated or insufficient yielding
               private wells at existing residential housing (new
               systems are not eligible for points under Criteria A, B
               or C)                                                                40

        2.      Consolidation of water  systems (can include improving
               technical, managerial and financial capacity development)                 25

        3.      System dependent on a Sole Source Aquifer for its
               source. (These points can only be obtained if system
               cores points from Criterion A, B, C. 1 .or C.2.g.)                          25

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        4.      A project that has received written commitment of funding from
               another governmental source (e.g., co-funded with Clean Water
               SRF, Rural Development, HUD, etc.) These points do not apply
               to refinancing of projects.                                             10

        5.      Consistent with Water Resources Management Strategy                  5

        6.      Proposes operational changes that improve and insure adequate
               technical, managerial and financial capacity of the system in
               order to insure compliance (guidelines to be developed)                   5

E.      Financial Need

        The Median Household Income (MHI) of the community in which the
        water service area is located is used as a numerator and the
        Statewide MHI is used as the denominator in the following equation
        to determine the financial need factor.

        (Community MHI x 100) / (Statewide MHI*) = Factor
Factor
<=70
70 - <=77.5
77.5 - <=85
85 - <=92.5
92.5-<=100
1000
Points
25
20
15
10
5

        *1990 Statewide MHI is $32,965.

        The MHI of the community in which the water service area is
        located and the Statewide MHI will be determined from income
        data in the  most recent United States census. If there is reason
        to believe that the census data are not an accurate
        representation of the MHI within the area to be served, the
        reasons will be documented and the applicant will furnish, or
        the Department may obtain, additional information regarding the
        MHI.  Information will consist of reliable data from local,
        regional, state or federal sources or from an income survey
        conducted  by a reliable impartial source.

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                                          PUERTO RICO
Priority Ranking Criteria

Projects will be prioritized based on points accrued in the following six categories:

•   Compliance with SDWA - Projects to correct SDWA noncompliance may receive points for all items that
    apply in this category. Twenty to 100 points will be given for each microbiological, organic, MCL,
    radiological, and inorganic or physical violation (e.g., 100 points for filtration and/or groundwater well,
    interconnection and/or consolidation, 20 points for radiological violations).

•   Public Health Risk - Projects to eliminate or combat critical, chronic, or potential health hazards may
    receive 25 to 50 points for all items that apply in this category (e.g., 50 points for inadequate source
    capacity, 25 points for new finished water storage facilities needed to maintain pressure and/or prevent
    contamination).

•   Systems in Need - Projects to address a system's infrastructure needs will  receive points for only one item
    in this category. For example, the maximum of 25 points will be given for complete replacement or major
    rehabilitation of the surface water filtration facility. Five points will be given for projects such as replacing
    or rehabilitating aged mains and appurtenances or asbestos mains.

•   Governmental Needs - Points are given for all items that apply in this category for projects that address the
    priorities of local government (e.g., consolidation, 25 points; co-funding  from another source, 10 points;
    capacity development, 5 points).

•   Special Priorities - Thirty-five points will be awarded to projects identified through State strategies.
    Twenty points will be assigned to projects identified through Comprehensive Performance Evaluations.

•   Affordability - Points will be awarded to disadvantaged systems, as determined by MHI.  Projects serving
    communities with lower MHIs will receive more points (e.g.,  30 points will be given if the MHI is less than
    $8,895; no points will be given if the MHI is greater than $17,790).
Notes
    Tie-Breaking Procedure - In the event of a tie, projects will receive points based on the population of the
    water system service area.  The system serving the larger population will be ranked higher.

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                                      PUERTO RICO

Category A, below, projects will be separately listed by the elements involved, and priority points will be
assigned for each element.
Points are assigned for each of the seven priority categories discussed below, as applicable:

A.     Compliance with Safe Drinking Water Act (SDWA):

       DWSRF  funds  are  to  be  utilized  to address contamination problems  through compliance
       requirements. Projects related to systems and or systems, which utilize surface water or ground
       water under the direct influence of surface water, that are not in compliance with the surface water
       treatment requirements, or have had any acute violations (e.g., fecal coliform or nitrates) and have
       been issued an administrative order, directive or recommendation by DOH requiring the correction
       of any noncompliance of its treatment facilities to address an immediate public health threat will be
       scored according the following:

       Maximum Contaminant Level  (MCL)/Treatment Technique Violations (more than one  item may
       apply:

       1. Microbiological

               a) Surface Water Treatment Rule

                      i.    Filtration and/or groundwater wells,                             lOOpts
                           interconnection and or consolidation
                           of water systems to comply with the SDWA

                      ii    Filtration Performance (NTU compliance)                        50 pts

                      iii   CT Disinfection                                               30 pts

               b) E. Coli                                                                 80 pts

               c) Total Coliform                                                          40 pts

       2. Organics

               Organics chemical (SOC/VOC) and disinfection                              40 pts
               by-products

       3. Maximum Contamination Level (MCL) violations                                30 pts

               (except acute violations) or exceedance of
               action levels Lead and Copper/Corrosion
               (mandated)

       4. Radiological                                                                   20 pts

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       5. Inorganic/Physical

               a) Nitrates                                                                 50 pts

               b) Other health-related inorganic                                             25 pts

B.     Public Health Risk:

       For projects which eliminate critical or chronic health hazard or
       potential health hazard or provide protection against significant health hazard,
       documentation must he provided by the applicant to determine if the public health
       problem exist. More than one of the following may apply for rehabilitation, replaced or
       repaired appurtenances such as:

       1. Inadequate Source Capacity                                                     50 pts

       2. Existing transmission or distribution mains                                       25 pts
       to prevent contamination caused by leaks or
       breaks 'in the pipe or improve water measures
       to maintain safe levels

       3. Existing pump stations or finished water storage                                  25 pts
       (uncovered if applicable).

       4. New finished water storage facilities
       that are 25 pts needed to maintain pressure in the system and/or
       prevent contamination

C.     Systems in need (Reliability Dependability):

       Projects related to replacement or-major rehabilitation of the existing treatment facilities or systems
       components to meet the design standards sanitary code.  One of the following will apply:

       1. Complete replacement or major rehabilitation                                    25 pts
        of the existing surface water filtration facility that has exceeded design
        life and/or does not meet the design standards in the current
        edition of PRASA's Design Standards, in lieu of filtration, installation of
        groundwater wells, and/or interconnection with, or purchase from adjacent water system.

       2. Upgrade, replace and/or install
       major vulnerable system components to meet the  design standards in
       the current edition PRASA's Design Standards. Any of the following apply:

               a) A principal component integral to an existing filtration                       10 pts
               process such a sedimentation, flocculation, filtration,
               chemical feed, of backwashing (can only receive points for
               Criteria C.2a or C. 1.)

               b) Pump stations                                                            10 pts

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               c) Existing wells                                                           10 pts

               d) Existing disinfection system for a groundwater/                             25 pts
               surface water supply

               e) Transmission main                                                       10 pts

               f) finished water or distribution storage                                       10 pts

               g) Other water treatment systems (or replacement                              10 pts
               Of source Instead of treatment)

       3. Aged mains and appurtenances                                                 5 pts

       4. Redundancy of critical components                                              5 pts
       (pumps, valves, chemical feed-system, etc.)

       5. Asbestos main replacement                                                     5 pts

       6. Control/automation for operational efficiency                                    5 pts
       (computerization, control valves, metering,
       laboratory upgrading)

       7. Inadequate source capacity                                                     5 pts
       which is not a public health hazard can only receive points for Criteria
       BlorC7.

D.     Governmental Needs (more than one may apply)

       Additional points will be assigned to a project on the basis of state or local
       governmental needs, policies, and/or requirements.

       1. Development of a water system or extending existing system                      25 pts
       to service contaminated or insufficient yielding private
       wells at existing  residential housing (new systems are
       not eligible for points under Criteria A, B or C2).

       2. Consolidation of water systems                                                 25 pts
       (can include improving technical, managerial and financial capacity development)

       3. System depend on a Sole Source Aquifer for its source.                           10 pts
       (These points can only be obtained if system scores
       points from Criterion A, B or C.)

       4. A project that has received written commitment of funding from another source    10 pts
       (e.g.  co-funded with Clean Water SRF, Rural Development, HUD, etc.)

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        5. Proposes operational changes that improve and insure                            5 pts
        adequate technical, managerial and financial capacity
        of the system in order to insure compliance (guidelines
        to be developed)

E.       Other Factors

        As a tie breaker, projects will be assigned points based in the population of the water system
        service area. Priority points will be calculated as the population served by the water system divided
        by 100,000, expressed as a decimal and added to the total accumulated.

F.      Special Priorities

        1. Strategy:
        Any project identified as a result of the Strategy identified above and or CPE will receive
        additional priority points that will be added to the total accumulated by the Project according to the
        following.

               Strategy                                                                   35 pts
               CPE                                                                      20 pts

        2. Emergencies:
        An emergency is a catastrophic situation that results in an
        imminent threat to public health. The determination of when an emergency exists will be
        made by the DOH. Projects designed to address emergencies will receive the highest priority
        ranking, Imminent threats to public health include:

               a) situations that result in the unavailability of potable drinking water for an extended
               period of time or evidence of a high incidence of water transmissible diseases

               b)evidence of presence of Regulated Contaminants in Drinking Water

G.      Affordabilitv:
This Criterion is to assist  systems most in need on a household basis. The points
awarded for this Category are documented by the latest census information. (See
Attachments B). For those systems described or identified as disadvantaged systems
the following priority points will be awarded:

        Median Household Income Levels (MHIL) will be used to assign points for affordability.

        Median Household Income (MHI)              Points
        less than $8,895.00                           30
        between $8,895.00 and $13,777.00              15
        between $13,778.00 and $17,790              5
        above $17,790                               0

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                                           DELAWARE
Priority Ranking Criteria

Projects will be prioritized based on points accrued in the following seven categories:

•   Quality Deficiencies - Projects for systems with NPDWR violations will receive 70 points for acute threats
    to public health (e.g., E. coli, nitrite, and nitrate), 50 points for non-acute threats, (e.g., total coliform
    bacteria, VOCs, SOCs, etc.), and 20 points for secondary standard violations, (e.g., iron, manganese, taste,
    odors, etc.).

•   Quantity Deficiencies - Projects for systems with quantity deficiencies will be given points for water
    pressure and supply problems. Forty-five points will be given for each acute quantity problem such as lack
    of adequate supply (90 points maximum), while 25 points will be awarded for each chronic problem such as
    lack of adequate storage (50 points maximum).

•   Treatment/Design Deficiencies -  Fifteen points may be given for each infrastructure problem resulting in,
    or at risk of causing, SDWA noncompliance that the project seeks to eliminate (e.g., degraded treatment
    facility, transmission mains, uncovered finished water storage).

•   Affordability - Points will be assigned to each project based on a comparison of county MFfl to the system
    MHI.  Awards will range up to a maximum of 320 points (systems with an MHI < 50 percent of county
    MHI) to a minimum of 10 points (systems with MHIs between 91 percent and 100 percent of county MHI).

•   Compliance with SDWA Regulations - Projects will be given points to the extent that they address
    violations of SDWA Regulations.  Projects will receive  40 points each for eliminating lead/copper rule and
    SWTR violations; 15 points each for elimination of Compliance/Enforcement Status; 5 points each for
    ensuring compliance with future SDWA Regulations, and up to 25 points for leading to system
    consolidation/acquisition.

•   System Description - Projects will be given 5 to 15  points based on the population served by the  system.
    Maximum points will be given to systems  serving between 1,001 and 10,000 people. Projects will be  given
    up to 5 points for system type. The maximum will be given to CWSs.

•   Bonus Points - Two bonus points  will be given to projects (10 points maximum) for each of the following:
    rate structures promoting conservation, metered service  connections, unaccounted for water loss of 15
    percent or less, certified operators, and documented maintenance schedule reviews.
Notes
    Funding Ceiling - No single project may receive more than 50 percent of the total DWSRF capitalization
    grant in a single year.

    Tie-Breaking Procedure - In the event of a tie, the project with the highest number of points under the
    Quality Deficiencies category will receive the highest priority.  If the score remains tied, the system serving
    the largest population will receive the higher ranking.

    Consolidation - For consolidation projects, points may be awarded for the relief of problems in the satellite
    system(s).

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                                        DELAWARE


VI.     Criteria and Method for Distribution of Funds

        A.      Process Description for Solicitation and Selection of Projects

        The State of Delaware will utilize a ranking system to prioritize the order in which eligible projects
        will be financed.  Projects will be ranked based upon the relative impact of the project in achieving
        the objectives of the Safe Drinking Water Act.  Projects for the creation of new public water
        supply systems are not eligible to receive DWSRF funds.

        Delaware Health and Social Services (DHSS) will conduct annual public workshops to inform
        public water supply systems of the availability of DWSRF assistance.  Notices of solicitation for
        projects to be funded will be sent to all DWSRF eligible public drinking water systems (and
        unserved/underserved communities near existing systems).  The solicitation letter will request
        systems to submit information on projects for which they are seeking DWSRF moneys for that
        designated year. This project information will be reviewed for accuracy and eligibility, and then
        given a priority ranking score based on the Project Priority Criteria system designated below.  The
        availability of funds for projects from other agencies and/or sources will also be investigated and
        discussed with the system.

        The DWSRF eligible projects and their respective information will then be listed in order of
        priority, highest to lowest, in a master list of all projects.  This master list of projects will be the
        Comprehensive Priority List. Utilizing the provisions in this document and the amount of available
        funds, a list of projects in order of priority ranking (Project  Priority List) which are expected to
        receive DWSRF financial assistance for the designated year will be placed in the IUP.  The
        following information will be included for each project: Name of system, project description,
        population served, priority point score, and amount to be funded. All systems with projects listed
        in the IUP will be contacted by the Administrator of the DWSRF before the intended time of
        installation of the project to enter into a binding commitment for receipt of funds, to inform them of
        the project review and bid contract requirements, and the  loan application process.

        An Operating Agreement between EPA and Delaware Health and Social Services (DHSS), which
        will contain the standard operating elements of the DWSRF not expected to change from year to
        year, will be attached to the Capitalization Grant Application. The Operating Agreement (OA) will
        be supplemented with an Intended Use Plan (IUP). This section, the Project Priority Ranking
        Criteria, will be a part of the Operating Agreement.

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1.      Priority Ranking System

       The purpose of the priority ranking system is to prioritize eligible projects to be funded by
       the Delaware DWSRF each year.  Delaware Health and Social Services (DHSS) proposes
       that maximum priority be given to projects that provide the greatest protection to public
       health, projects needed for SDWA compliance and projects which assist systems most in
       need on a per household basis. The criteria for scoring will also  consider issues that are
       related to infrastructure  upgrading or replacement. Projects for disadvantaged
       communities/systems will be ranked at the same time using the following priority ranking
       system and may receive subsidies when available to bring the project into the affordable
       range using state affordability criteria (Section XIII.C.).

       a.      Project By-Pass Provisions

               A project on the fundable portion of the list may be bypassed if it is determined
               that the project will not be ready to proceed during the funding year, the Project
               Priority List fails to meet the 15% assistance to small systems, a system is
               unwilling to address any Significant Non-Compliance Issues (SNC) issues, or a
               system is lacking technical, managerial or financial capability. The applicant
               whose project is to be bypassed will be given written notice by DHSS.  Projects
               that have been bypassed may be reinstated on the fundable portion of the list if
               sufficient funds are available and the project completes the necessary tasks to
               proceed.  Funds which become available  due to the utilization of the bypass
               procedure will be allotted to the next project on the list that is ready to proceed.
               Delaware will proactively work with bypassed projects to ensure that the project
               will be eligible for funding in the following fiscal year, to the maximum extent
               practicable.

               i.      Readiness to Proceed

                      A project will be determined "ready to proceed"  if the system will begin
                      construction within nine months  after the approval of the State's
                      capitalization grant application by the EPA Administrator. All required
                      engineering, plan and environmental reviews for projects must be
                      completed within 45 days prior to the start of construction.

               ii.     15% Assistance to Small Systems

                      Annually, a minimum of 15% of the DWSRF capitalization fund must be
                      allocated to provide loan assistance to  systems serving fewer than 10,000
                      people (Section III.F.) to the extent that there are a sufficient number of
                      eligible projects to fund.  A fundable project, for a system larger than
                      10,000  people, may be by-passed if the Project Priority List fails to meet
                      the required 15% assistance to small systems.

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        iii.    Systems in Significant Non-Compliance (SNC) with the SDWA
              Projects for public drinking water systems that are in significant non-
              compliance with the Safe Drinking Water Act will NOT be eligible for
              DWSRF moneys unless:

               a.)     the system resolves all SNCs to the satisfaction of the Office
                      of Drinking Water, or
               b.)     the project(s) for which they are applying for DWSRF
                      moneys will resolve all SNCs.

        iv.     Systems Lacking Capacity Development

               Projects for public drinking water systems that lack the technical
               managerial or financial capability to maintain SDWA compliance will
               NOT be eligible for DWSRF moneys unless:

               a.)     the owner operator or the system agrees to undertake
                      feasible and appropriate changes in operation, or
               b.)     the use of the financial assistance from the DWSRF
                      ensure compliance over the long-term.

b.      Emergencies

        Projects necessary to alleviate emergency or catastrophic situations that
        result in an imminent threat to public health can be immediately elevated to
        the top of the priority list upon recommendation by DHSS and the
        concurrence of the Cabinet Committee on State Planning Issues. Imminent
        threats to public health include events such as: total loss of water supply or
        loss of a major component due to a natural or unforeseen disaster which
        could not have been prevented by applicant (e.g. tornado, flood, severe
        weather, fire, collapse, etc.), or other water emergencies which could not
        have been prevented by exercise of reasonable care by the applicant.

        Projects displaced due to an emergency project will be placed on the top of the
        Project Priority List and will be funded as soon as funds become available.

c.      Single Project Limit

        No single project may receive more than 50% of the total DWSRF capitalization
        fund in a single year.

d.      Tie Breaking Procedures

        When two or more projects score equally under the Project Priority System a tie
        breaking procedure will be utilized. The project with the greatest number of
        points under the Quality Deficiencies,  Section VI.A.2.a., will receive the higher
        ranking. If this still results in a tie  score, the size of the population will be used as
        a tie breaker with the highest priority going to the system with the largest
        population.

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        e.      Projects Not Eligible for Funding

               The following projects and activities will not be eligible for funding through the
               DWSRF:

               •   Dams, or rehabilitation of dams;
               •   Water rights, except if the water rights are owned by a system that is being
                   purchased through consolidation as part of a capacity development strategy;
               •   Reservoirs, except for finished water reservoirs and those reservoirs that are
                   part of the treatment process and are located on the property where the
                   treatment facility is located;
               •   Laboratory fees for monitoring;
               •   Operation and maintenance expenses, Projects needed mainly for fire
                   protection;
               •   Projects primarily intended to serve future growth;
               •   Projects for systems that lack adequate technical, managerial and financial
                   capability, unless assistance will ensure compliance;
               •   Projects for systems in significant non-compliance (SNC), unless funding will
                   ensure compliance.

        f .      Refinancing of Existing Loans

               The DWSRF may be used to buy or refinance debt obligations for DWSRF
               eligible projects (private systems are excluded). The long term debt must have
               been incurred after July 1, 1993 to be eligible for refinancing. Consideration for
               these applications will be entertained only after projects addressing public health
               protection and compliance have been funded.

2.       Criteria Description

        The criteria used to prioritize the eligible projects are described and weighted below.
        Points apply to the system applying for assistance.  For consolidation projects, points can
        be awarded for the relief of problems in the satellite system(s).  Scoring is based on the
        sum of all possible points awarded within each category.  Systems which score the highest
        point total will be given the highest priority on the project list.  Consistent with the
        priorities stated above, the numerical scores in the DWSRF priority ranking system are
        based on the following criteria:

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a.       Quality Deficiencies - Violations of National Drinking Water Standards

Maximum Contaminant Levels (MCLs) are established by the SDWA for those contaminants
which may be detrimental to public health. Exceedances of these levels in the 5 years preceding the
development of a priority list carry the following weightings:

                                                                      Priority
                                                                      Points

Acute (Public Health: 0-210 points)
E. coli                                                                  70
Nitrate (N03 - N)                                                         70
Nitrite (NO-N)                                                           70

Non-Acute (Public Health: 0 - 450 points)

Total Coliform Bacteria                                                   50

Volatile Organic Chemicals (VOCs)                                         50
Total Trihalomethanes (TTHMs)                                           50
Synthetic Organic Chemicals (SOCs)                                       50
Trace Metals                                                            50
Unregulated VOCs                                                       50
Unregulated SOCs                                                        50
Turbidity                                                                50
Radiologicals                                                            50

Secondary Standards (Other: 0-100 points, 100 points maximum)

Iron                                                                    20
Manganese                                                              20
pH                                                                     20
Chloride                                                                20
Total Dissolved Solids                                                    20
Sulfate                                                                  20
Taste                                                                   20
Odor                                                                   20
Color                                                                   20

b.   Quantity Deficiencies

Acute (Public Health: 0 - 90 points)
System Water Pressure less than 25 psi                                      45
Water shortages - lack of adequate supply                                   45

Chronic (Public Health: 0 - 50 points)
Water shortages - lack of adequate storage                                   25
System Water Pressure greater than 100 psi                                  25

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c.     Treatment /Design Deficiencies

Infrastructure problems resulting in or at risk of causing non-compliance with SDWA.
(Compliance: 0 - 240 points)

Degraded Treatment Facility                                                15
Inadequate Source-Intake Structure                                          15
Faulty Pumping Station                                                    15
Inaccurate Controls / Instrumentation                                        15
Unsatisfactory Storage                                                     15
Aging or Corroded Transmission Mains                                      15
Aging or Corroded Distribution Mains                                       15
Broken Meters                                                            15
Replacement of Contaminated Source with Uncontaminated Source              15
Lack of Disinfection Treatment                                             15
Lack of Corrosion Control Treatment                                        15
Lack of Nitrate Removal Treatment                                         15
Inadequate Filtration                                                       15
Non-Functioning Backflow Prevention Devices                                15
Lack of Critical Component Redundancy (pumps, valves, chemical feed, etc)      15
Unreliable Emergency Power Source                                         15

d.     Affordability (Affordability: 0 - 320 points)

 Degree of need based upon County median household income (CMHI)
 compared  to the System median household income (SMHI).

 SMHI is up to 50% of CMHI                                              320
 SMHI is 5  1 % to 60% of CMHI                                           160
 SMHI is 61 % to 70% of CMHI                                            80
 SMHI is 11 % to 80% of CMHI                                            40
 SMHI is 8  1 % to 90% of CMHI                                           20
 SMHI is 91 % to 100% of CMHI                                           10
 SMHI is greater than 100% of CMHI                                       0

The MHI of the water system's service area and the County-wide MHI will be determined from
income data  in the most recent Delaware Health Statistics Center Census Tract Geography for
Delaware. If there is reason to believe that the census data  are not an accurate representation of
the MHI within the area served, the reasons will be documented and the applicant will furnish
additional information regarding the MHI. Information will consist of reliable data from local,
regional, state or federal sources or from an income survey  conducted by a reliable impartial party.

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e.      SDWA Regulations

Project for compliance with SDWA Regulations (Compliance: 0-80 points)
Lead / Copper Rule                                                       40
Surface Water Treatment Rule                                             40

Project will result in the elimination of Compliance / Enforcement Status
(Compliance:  0-30 points, 30 points maximum)
In Significant Non-Compliance                                             15
Active Bi-Lateral Compliance Agreement                                    15
Alternate Contaminant Level                                               15
Active Administrative Compliance Order                                    15

Project for compliance with future SDWA Regulations
 (Compliance: 0-35 points)
Enhanced Surface Water Treatment Rule                                    5
Groundwater Disinfection                                                 5
Disinfection By-Products                                                  5
Radon                                                                  5
Radionuclide                                                             5
Arsenic                                                                 5
Sulfate                                                                  5
Project to result in (Other: 0-25 points)
Service to unserved/underserved areas with water quality deficiencies           10
Consolidation of two or more systems                                       15

f.      System Description

Population Served (Other: 5-15 points)
25-1,000                                                                10
1,001 - 101000                                                           15
> 10,001                                                                5

Public Water System Type (Other:  1-5 points)
Community                                                             5
Non-Transient Non-Community (non-profit)                                 3
Transient Non-Community (non-profit)                                      1

g.      Bonus Points (Other: 0-10 points)

System utilizes rate structure based on water usage promoting
conservation                                                             2
System is metered at service connections                                    2
System has unaccounted for water loss of 15% or less                         2
System has certified operator                                              2
System has documented  maintenance schedule review                         2
  (Exercise valves, flush system, test backflow prevention devices, etc.)

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VII.    Comprehensive Project Priority List

        A comprehensive list of all projects that are eligible for funding in the designated fiscal
        year will be included within the IUP. A project must be listed in the IUP to be eligible for
        financing.  The comprehensive list of projects, in order of priority, will be made available
        for public review and comment each year.  The following information will be included for
        each project: Name of system; project description; population served; priority point score;
        and amount to be funded.

               A.     As the State of Delaware is submitting the non-project activities portion
               (set asides) of the grant award, this document does not include the comprehensive
               priority list. This list will be included with the submission of the subsequent
               application for the project funds at a later date.

               B.     Delaware places priority on categories of projects that meet departmental
               and State goals as stated in the long and short term goals of the IUP (Section 11).
               The top three priorities are: the resolution of imminent threat to public health by
               addressing acute contaminants, followed by  the resolution of compliance issues,
               and the availability of affordable drinking water. Other priorities include long
               term health protection through pollution prevention, meeting long term
               infrastructure needs, and consolidation of systems to promote viability, where
               appropriate.

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                                            MARYLAND
Priority Ranking Criteria

Projects will be prioritized based on points accrued in the following four categories:

•   Public Health - Points will be given to projects based on the severity of the threat posed to public health.
    An acute public health problem (e.g., fecal coliform, non-compliance with the SWTR) will receive 40
    points, a chronic contamination problem (e.g., persistent MCL violations) will receive 30 points, and a
    potential problem (e.g., periodic water outages, periodic MCL violations) will receive 20 points. Projects
    will receive points for only one type of health problem: acute,  chronic, or potential.

•   Compliance - Thirty points will be assigned to a project if the system is under either a State or local order to
    correct a violation of the State or federal drinking water standards.

•   Environmental and System Reliability - Projects that seek to correct environmental and system reliability
    problems may receive points for all items that apply in this category. Up to 6 points will be given to
    projects that address environmental or public safety problems (e.g., insufficient sludge handling facilities,
    inadequate water pressure, etc.).  Four points will be given for projects needed to improve reliability (e.g.,
    consolidation, increased capacity for finished water storage, etc.).

•   Affordability - Points will be given to systems based on affordability. Projects will earn the most points if
    the calculated Target User Rate (TUR)1 is more than 1.5 percent of the community MHI.
Notes
    Land Acquisition/Conservation Easement - Separate priority ranking criteria have been developed for the
    State's proposed Land Acquisition/Conservation Easement Loan Program. These projects will be evaluated
    based on source type, watershed relationships, and their ability to address violations of the drinking water
    standards.

    Incentive-Based Protection Measures - Separate eligibility and ranking criteria are used for projects such
    as creation of a local outreach program, creation of a local tree planting program, or funding the
    development of a local wellhead protection ordinance.  Criteria on which these projects will be evaluated are
    existence of local support, recognition by local government, and whether primary drinking water
    contaminants are addressed.
          J(TUR = Debt + O&M per year per equivalent dwelling unit)

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                                     MARYLAND
         DRINKING WATER STATE REVOLVING LOAN FUND PROGRAM
                 PROJECT PRIORITY RANKING/SCORING SHEET
Project Name:
PROJECT SCOPE CATEGORY (check where applicable)

[ ]   Drinking Water Source Development
[ ]   Drinking Water Treatment Plant
          [ ] New                 [ ] Upgrade           [ ] Expansion
          [ ]  Surface Water        [ ] Groundwater
[ ]   Drinking Water Storage
          [ ] New                 [ ] Rehabilitation
[ ]   Drinking Water Distribution System
          [ ] New                 [ ] Upgrade


I.    PUBLIC HEALTH BENEFITS (Maximum 40 Pts)

     A.  Project will eliminate an acute public health problem               (40 pts) or
     B.  Project will eliminate a chronic public health problem               (30 pts) or
     C.  Project will eliminate a potential public health problem              (20 pts) or
II.   COMPLIANCE BENEFITS (Maximum 30 Pts)

     Project will provide compliance with a Notice of Violation or
     compliance with the Safe Drinking Water Act                         (30 pts)
III.  ENVIRONMENTAL AND SYSTEM RELIABILITY BENEFITS (Maximum 10 Pts)

     A. Project will eliminate an environmental problem                    (5 pts) or
     B. Project will eliminate a public safety problem                      (5 pts) and/or
     C. Project will improve the water system reliability                    (5 pts)

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IV.  AFFORDABILITY SCORING CRITERIA (Maximum 20 Pts)

     1.    Project Target User Rate (TUR) is more than 1.50% of the
          Community Median Household Income (MHIc)                   (20 pts) or
     2.    Project TUR is between 1.25% and  1.50% of MHIc                (10 pts) or
     3.    Proj ect TUR is between 1.00% and  1.25 % of MHIc                (5 pts) or
     4.    Proj ect TUR is less than 1.00% of MHIc                          (0 pts)
                                             TOTAL SCORE/POINTS
DRINKING WATER STATE REVOLVING LOAN FUND PROGRAM
PUBLIC HEALTH/WATER SUPPLY PRIORITY RANKING/SCORING CRITERIA
I.  PUBLIC HEALTH BENEFITS

   A.  Project will eliminate an acute public health problem                    (40 pts)

   Problems which pose immediate and ongoing health hazards to water consumers include:

        1.   Non-compliance with the Surface Water Treatment Rule.
        2.   Fecal coliform bacteria contamination.
        3.   Nitrate contamination.
        4.   High levels of any contaminant which presents an immediate risk to health.
        5.   Insufficient water quantity or pressure to meet basic sanitary needs.

                                            OR

    B.   Project will eliminate a chronic public health problem                  (30 pts)

   Problems which pose chronic or long-term health hazards to water consumers include:

        1.   Persistent violation of a maximum contaminant level at a concentration which does not
            present an immediate risk to health (e.g. total coliform bacteria, volatile organic chemicals,
            synthetic organic chemicals).

                                            OR

   C.  Project will eliminate a potential public health problem                  (20 pts)

   Problems which are likely to result in public health hazards include:

        1.   Extremely deteriorated or inadequate treatment and delivery systems which are likely to
            degrade water quality.
        2.   Periodic water outages.
        3.   Periodic maximum contaminant level violation.

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II.  COMPLIANCE BENEFITS

    Project is under a MDE Notice of Violation or a Local Health Department Order to correct violation
    of State and/or federal drinking water standards.                            (30 pts)

III. ENVIRONMENTAL AND SYSTEM RELIABILITY BENEFITS

   A.    Project will eliminate an environmental problem                      (5 pts)
        Problems which are likely to degrade the environment include:

        1.   Insufficient sludge handling facilities at an existing water treatment plant
        2.   Lack of system water conservation program

                                             OR
   B.   Project will eliminate a public safety problem                          (5 pts)
        Problems that present on-going public safety hazards include:

        1.    Inadequate water pressure
        2.    Unsafe finished water storage
        3.    Lack of significant safety measures (e.g. chemical containment)

                                          AND/OR

C.  Project will improve the water system reliability                            (5 pts)

        1.    Interconnection of existing water systems or purchase of systems in whole or in part or of
             capacity in other systems where  cost effective, or extension of water service for an existing
             community without a safe adequate water supply to meet system reliability

                                              OR

        2.    Remedies to improve system reliability include:                   (5 pts)

                a. Provide redundancy to critical treatment or delivery functions
                b. Eliminate dead ends and provide adequate looping in a distribution
                  system
                c. Increase water storage capacity
                d. Provide emergency backup electrical power source

IV.    AFFORDABILITY SCORING CRITERIA

       Project Target User Rate (TUR) is more than 1.50% of the Community Median

       1.   Household Income (MHIc)                                       (20 pts)
       2.   Project TUR is between 1.25% and 1.50% of MHIc                  (10 pts)
       3.   Project TUR is between 1.00% and 1.25% of MHIc                  (5 pts)
       4.   Project TUR is less than  1.00% of MHIc                            (0 pts)

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                                         PENNSYLVANIA
Priority Ranking Criteria

Projects will be prioritized based on points accrued in the following six categories:

•   Public Health - A maximum of 40 points may be given to projects that eliminate public health hazards. For
    example, for an acute hazard, a project  will receive 40 points, for a chronic health hazard  30 points and
    fewer points for periodic or potential health hazards.

•   Compliance - A maximum of 20 points may be given to projects that improve a water system's ability to
    comply.  For example, a system will receive 20 points for a project which achieves  compliance with an
    order, decree, agreement, or regulatory deadline and 10 points for a project which improves  compliance
    where no order, decree or agreement has been issued.

•   Affordability - A maximum of 20 points may be given to projects based on affordability. Projects for
    systems where the municipal MHI  is less than or  equal to  State MHI will  receive  20  points. Projects for
    systems where the municipal MHI is higher will receive fewer points.

•   Environmental and Social Impacts - Projects may receive  points (maximum of 5) for  all criteria that apply
    in this category: 3 points  for projects that  will have a beneficial environmental impact and 2 points for
    projects that will have a beneficial social impact.

•   Improvements  in Adequacy and Efficiency  - A maximum of 5 points  may be given to projects that
    increase the amount of water available (source, storage, pressure, etc.), provide water conservation, improve
    aesthetic water quality, improve the applicant's ability to operate  and maintain the facility, or increase the
    reliability of service.  The greatest number of points, 5, will be given to projects that include consolidation.

•   Public Safety - A maximum of 5  points may be given to projects that correct a  public safety hazard to
    workers or others  in the  event of system failure (e.g., storage tanks, major pump stations, treatment
    buildings, etc.), but only if the facility or equipment is essential for continued operation of the water system.
    Projects with critical or chronic hazards will receive 5 points, with periodic or potential hazards will receive
    3 points and protection against hazard will receive 1 point.
Notes
    High Risk Levels - Pennsylvania has developed a list of high-risk levels for common contaminants found in
    drinking water and uses it to assist in prioritizing public health projects.

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                                    PENNSYLVANIA
                                 Project Prioritization Criteria

A. BENEFITS TO PUBLIC HEALTH - For projects which propose to remedy a contamination
   problem, the level of contamination must be determined in the same manner as compliance with an
   MCL (e.g. average of the original and a check sample when monitoring annually or less frequently, or
   annual average of quarterly samples).

   1. Eliminates critical or chronic health hazard

       a.  Forty (40) points will be awarded to projects that propose to eliminate a problem that poses
           an acute, ongoing health hazard to the consumer.  The applicant must provide written
           documentation to confirm these problems. The project engineer will be responsible for
           evaluating the documentation provided by the applicant to determine if the reported problems
           exist STATEMENT OF THE PROBLEM BY THE APPLICANT IN THE PLANNING
           AND FEASIBILITY REPORT (PART II OF THE APPLICATION) IS NOT, BY
           ITSELF, VERIFICATION. THESE STATEMENTS MUST BE SUPPORTED BY
           ANALYTICAL RESULTS AND/OR ENGINEERING REPORTS.

           Examples:
           i. A violation of a primary MCL or maximum unregulated contaminant concentration and its
             associated high risk to health level (see attached list).

           ii. In order for coliform violations to qualify for forty points, the presence of fecal coliform
             must be verified. Projects qualifying for 30 or 40 priority points due to coliform
             contamination will normally be waterline extension projects which propose to eliminate the
             use of individual wells or unpermitted community systems operating without disinfection.

           iii. No water is available at the tap from the system's permitted sources or for unpermitted
             systems from sources normally used.  The length of the outage to some or all of the
             customers is,  or is expected to be (e.g., verification that failure of a critical part of the
             system is probable), a week or more.

           iv. Giardia cysts in the filtered water. Giardia cysts in the raw water of systems without
             filtration or systems which currently have an unacceptable filter plant performance
             evaluation due to facility deficiencies.

               NOTE: Since only the presence of Giardia cysts trigger the requirement for establishing
               concentrations and contract times  (CTs), a system which is already triggered for filtration
               and disinfection due to source water coliform or turbidity is not given a higher ranking
               because of these source contamination problems. The regulatory requirement to provide
               2.5 mg/1 of disinfectant adequately addresses all water quality problems associated with
               the filter rule other than Giardia.

       b.  Thirty (30) points will be awarded to  projects that propose to  eliminate a problem which
           poses a chronic health hazard to the consumer.  The same verification and documentation as
           in "A.I.a." above will be required.

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       Examples:
       i. A violation of a primary MCL or maximum unregulated contaminant concentration but less
         than the associated High Risk level.  For example, the annual average concentration of
         quarterly trichloroethylene samples is between 0.005 mg/L (MCL) and 0.3 mg/L (High
         Risk level).

       ii. Total coliform contamination.

       iii. Unfiltered surface water source AND a disinfection process which is not capable of 99.9%
          inactivation of Giardia cysts.

           NOTE:  For a disinfection process to considered capable of 99.9% inactivation of Giardia
           cysts, a minimum of 60 minutes of contact time is required at peak hourly flow.

2.  Eliminates periodic or potential health hazard

    a. Twenty (20) points will be awarded if the project proposed is to eliminate a documented
      health hazard which has occurred periodically or if there is documented (written
      correspondence, order, etc.) potential for the problem to occur.

       Examples:
       i. A periodic exceedence of a primary MCL or maximum unregulated contaminant
         concentration due to an intermittent malfunction of treatment equipment.

       ii. A periodic water outage. A water outage occurs when a water system is unable to provide
         water to all of its customers for a period of time at least a day in length, from its permitted
         sources (other than emergency permits).  For unpermitted systems, these sources would be
         the ones normally used.

       iii. Unacceptable filter plant performance evaluation due to a structural need AND a
          disinfection process which is not capable of 99.9% inactivation of Giardia cysts.

    b. Fifteen (15) points will  be awarded to projects which propose to cover a finished water
      reservoir, add filtration for a surface water source where the disinfection process is currently
      capable of 99.9% inactivation of Giardia cysts, address structural needs identified in an
      unacceptable filter plant performance evaluation rating of a plant where the disinfection process
      is currently capable of 99.9% inactivation of Giardia cysts or add disinfection where none
      currently exists.  Projects which propose to provide public water supply for anticipated future
      development will NOT receive 15 points for adding  disinfection, since these homeowners
      would have the option of providing their own disinfection had they developed an individual
      water system.

3. Provides protection against significant potential health hazard

    a. Ten (10) points will be awarded to projects which propose preventative maintenance
       improvements.

       Example: Although no MCL violation or health hazard has been observed, replacing an old,
       undersized or malfunctioning chlorinator or replacing  leaking waterlines would fall into this
       category.

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B. IMPROVEMENT IN ABILITY TO COMPLY

    1. Improves water system's ability to comply (PENNVEST should not be used to reward or
     penalize systems for compliance. Evaluation needs to be based strictly on benefits provided).

       a. Twenty (20) points will be awarded to projects which propose to comply with or to improve
         compliance with existing laws, rules or regulations; or a violation which poses an acute health
         or safety hazard (i.e., primary violation).

           Example: Any project which will ensure compliance with the Filtration Rule interim and
           final deadlines.

       b. Ten (10) points will be awarded to projects which propose to improve compliance with
         existing laws, rules or regulations, when no compliance order, decree or agreement has been
         issued and there is no deadline date specified in regulation; or a violation which does not pose
         an acute health or safety hazard, but does pose a significant compliance problem (i.e.,
         secondary violation).

           Example: A significant compliance problem is one  such as an MCL violation (not posing an
           acute health risk) or normal operating pressure of less than 20 pounds per square inch (PSI).

       c. Five (5) points will be awarded to projects which propose to provide protection against a
         significant problem by compliance with Section 109.4 of the Safe Drinking Water Regulations
         as follows:

              Protect the water sources under the supplier's  control

              Provide treatment adequate to assure that the public health is protected

              Provide and effectively operate and maintain public water system facilities

              Take whatever investigative or corrective action is necessary to assure that safe and
              potable water is continuously supplied to the user.

              NOTE: SINCE NON-PUBLIC WATER SYSTEMS ARE NOT INCLUDED IN THE
              DEFINITION OF WATER SYSTEM IN THE PENNVEST REGULATION, NO
              COMPLIANCE POINTS WILL BE AWARDED FOR CORRECTION OF A
              PROBLEM AFFECTING THESE  TYPES OF SYSTEMS.

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C. AFFORDABILITY is the degree of need based upon the Pennsylvania median household income1
(PAMHI) compared to the municipal median household income.  It is calculated by dividing the PA
median household income by the median household income specific to the municipality from which the
funding application is being submitted.

                            MunicipalMedianHouseholdlncome    -r^ /">/">Q/
                               pAMedianHouseholdlncome= Ji 1 UU /O

       a. Twenty (20) points will be assigned where the municipal median household income (MMHI)
         is 0% to 25% of the PA median household income (PAMHI).

       b. Sixteen (16) points are assigned where the MMHI is greater than 25% and up to 50% of the
         PAMHI.

       c. Twelve (12) points are assigned where the MMHI is greater than  50% and up to 75% the
         PAMHI.

       d. Eight (8) points are assigned where the MMHI is greater than 75% and less than 100%.

       e. Four (4) points are assigned where the MMHI is 100% or greater than the PAMHI.

D. ENVIRONMENTAL2 AND SOCIAL IMPACTS

    1. Beneficial environmental and social impact

       a. Five (5) points will be awarded to proposed projects which will improve some existing
           environmental condition.

         Example:  Installation of sludge handling facilities at an existing filtration plant.

       b. Two (2) points will be awarded to proposed projects which will improve the quality of life for
           consumers.

         Example:  Any project which provides benefits to public health or public safety.

       c. One (1) point will be awarded for any project in which there is no demonstrable negative
         environmental or social impact.

E. IMPROVEMENT IN ADEQUACY AND EFFICIENCY

    1. Increases available water (source, storage, pressure, etc.), provides water conservation, improves
      aesthetic water quality, improves applicant's ability to operate and maintain the facility and/or
      increases the reliability of service. Improvements to the aesthetic water quality will generally
      apply to lowering the levels of the secondary contaminants. Improvements designed to lower or
      prevent increases in turbidity levels will only be given points under Section A - Benefits to Public
      Health, since turbidity is a primary contaminant.
1 U.S. Census reports a PA median household income of 29,069.
2 For the purposes of this guidance, "environmental" means all conditions, circumstances, and influences
surrounding and affecting animal or plant organisms.

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       a. Five (5) points will be awarded to projects which propose through water system consolidation
         to improve facility operation or maintenance, and/or improve the reliability/viability of the
         system.  This only applies to existing public water systems, not to new systems or waterline
         extensions.  Consolidation involves one water system assuming ownership of another; physical
         interconnection may or may not be involved. Consolidation occurs through acquisitions,
         mergers, satellite ownership, takeovers, buyouts or regionalization.

       b. Three (3) points will be awarded to projects which propose to increase available water,
         provide water conservation, improve aesthetic water quality, improve applicant's ability to
         operate and maintain the facility and/or increase the  reliability of service by means other than
         water system consolidation.

       c. One (1) point will be awarded to proposed projects  in which a regional water system is
         considered but is not available as a reasonable alternative.
F. BENEFITS TO PUBLIC SAFETY

    Water system facilities (e.g., storage tanks, major pump stations, treatment building, etc.) which pose
    a safety hazard to workers and/or others in the event of system failure will receive ranking points for
    correction only if the facility/equipment is essential for continued operation of the water system.
    Public safety may depend also upon the assured availability of adequate quantity and pressure of
    water for fighting fires. Projects that are mainly for fire protection are not eligible for DWSRF
    assistance. However, projects that include improvements to fire protection as an ancillary project
    benefit or as a secondary project purpose, may be considered for DWSRF assistance.

    1. Eliminates critical or chronic safety hazard

       a. Five (5) points will be awarded to projects that propose to eliminate a problem that poses an
          ongoing safety hazard. Written documentation of the problem is required.

           Examples:
           i.  Proposed project is for replacement or major rehabilitation of an unsafe water supply
              storage tank that may collapse or a major pump that may fail.

           ii. Project will meet fire code where system currently provides less than the minimum
              amount/pressure of water recognized as necessary for fire protection.  (Improvement to
              fire protection is a secondary project purpose.)
    2.  Eliminates periodic or potential safety hazard

       a. Three (3) points will be awarded if the project proposed is to eliminate a documented (in
           writing) safety hazard which has occurred periodically or if there is potential for the problem
           to occur.

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           Examples:
           i. Project will correct existing problems at a water storage tank that does not comply with
             Occupational Safety and Health Administration (OSHA) safety standards (e.g., no fencing
             is provided around the perimeter of the tank).

             Project will replace or provide major rehabilitation of pumps that periodically fail (e.g., due
             to an inadequate backup electrical supply).

           ii. Project will install fire hydrants where, because of a current lack of or an insufficient
             number of hydrants, the system currently fails to meet fire protection codes. (Improvement
             to fire protection is a secondary project purpose.)

    3.  Provides protection against significant potential safety hazard

       a. One (1) point will be awarded to projects which propose preventative maintenance
           improvements.

           Examples:
           i. Project will provide recoating of a water storage tank.

           ii. Project will correct problems in the sufficiency of water pressure at some  locations in the
             system which cause the system to fail to meet fire protection codes. (Improvement to fire
             protection is a secondary project purpose.)
G.  READINESS TO PROCEED is described in terms of the readiness by which the project will be
    initiated.  "Readiness" is described specifically by the applicant-proposed project start dates.

       a. A "High" value is assigned for those applicants that propose project start dates within six
         months of the actual or anticipated funding approval date.

       b. A "Medium" value is assigned where the project will be initiated greater than six months but
         less than or equal to one (1) year from the date of funding approval.

       c. A "Low" is assigned where the project will be initiated greater than one (1)  year from the date
         of funding approval.

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                                             VIRGINIA
Priority Ranking Criteria

Projects will  be divided into  two tiers.   Tier H projects, addressing acute  or chronic health or SDWA
compliance problems, are given first priority.  Tier O projects, addressing all other problems, are then
prioritized.  Within the two tiers, projects are prioritized based on eight criteria that fall under three category
groups.  Tier H projects are prioritized based on all eight criteria, while Tier O projects are prioritized based
only on criterion 3 to criterion 8.

Group I - Health and Compliance

•   1. Acute Health Priority, SDWA  Compliance - Projects for systems with acute health issues that may
    affect individuals in the  short term will  be given 50 points (e.g., Commissioner's letter  declaring health
    hazard, SWTR violations, TCR violations).

•   2. Chronic Health Priority, SDWA Compliance - Projects for systems with chronic health issues that may
    affect individuals over a lifetime will be given 30 points (e.g., SNC, lead and copper violations).

•   3. Public Health Priority, Waterworks Regulations  Compliance - Projects to improve infrastructure
    necessary for compliance with Waterworks Regulations will be given a maximum of 15 points (e.g., resolve
    quality or quantity inadequacies of groundwater supply, ensure water receives proper treatment).

Group II - Affordability

•   4. Affordability - Projects will be  given up to  20 points based  on resources available to the population
    served by the system. For example, if the county/city MHI is less than $22,000, the project will receive 20
    points, but if it is greater than $33,000, the project will receive no points.

Group III - State Discretion

•   5. Regionalization - Regionalization projects will receive 8 points.

•   6. Readiness to Proceed  - Not applicable after 10/1/98.

•   7. Other Funds - Points will be given to  projects based on the  amount of funds, as a percentage of the
    construction loan, that the system  will contribute.  For example,  systems  that contribute more than 20
    percent toward a project will  receive 4 points, and  systems that contribute less than 5 percent toward a
    project will receive no points.

    8. Projected Cost per Connection - Points will be given to projects based on the construction loan's cost
    per household.  For example, projects that would cost each household more than $5,000 will receive no
    points and projects that would cost each household less than $500 will receive 3 points.

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                                         VIRGINIA
IX. CRITERIA UTILIZED IN PRIORITIZING CONSTRUCTION PROJECTS

This priority system ensures that all eligible acute or chronic health/ SDWA compliance projects are
funded before any other eligible project. The priority of project funding is based upon a two-tiered
system after considering eligibility.

 Each application for project funding is reviewed and is identified as being based on either (1) an eligible
acute or chronic health/ SDWA compliance problem or (2) other problem. All eligible acute or chronic
health/ SDWA compliance projects are designated as Health (Tier Designation H).  The remaining
eligible projects are designated as Other (Tier Designation O).  Tier H projects are funded first. After
all Tier H projects are funded, Tier O projects would be funded.
                                       Acute or Chronic
                                        Health/ SDWA
TierH
Use criteria 1 to 8
                                                                                     Project #1
                                                                                     Proiect #2
                                                       TierO
          Use criteria 3 to :
              criteria
After VDH designates a project to a particular tier, it is necessary to sort priority within that tier. Eight
criteria within three general groups are used to accomplish the sorting within tiers.  VDH will assign
points to all eligible projects (including potential refinancing efforts) in accordance with the following
criteria.

GROUP I ~ Health and Compliance criteria (direct health violations or infrastructure needs that affect
health issues.

(1) Acute Health Priority, SDWA Compliance                         50 points
(2) Chronic Health Priority, SDWA Compliance                       30 points
(3) Public Health Priority, Waterworks Regulations Compliance         15 points
POINTS SUBTOTAL = 95 points or 70.37%

GROUP II - Affordability Criteria
(4) County/ City Median Household Income (MHI)
POINTS SUBTOTAL = 20 points or 14.815%
      20 points

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GROUP III - State Discretion criteria

(5) Regionalization                                                 8 points
(6) Readiness to proceed (disallowed for projects funded beginning      5 points
   with grant from Federal FY 99 funds)
(7) Other funds                                                     4 points
(8) Projected cost per connection                                     3 points
POINTS SUBTOTAL = 20 points or 14.815 %

                                     TOTAL                       135 points

Acute Health Priority, SDWA Compliance (50 points).  These are health concerns that affect an
individual in the immediate short-term and are given the highest weight of any criteria.

•  Commissioner's letter declaring a health hazard
•  Surface Water Treatment Rule violation, i.e., inadequately treated surface water or groundwater under the
        influence of surface water (GUDI)
•  Persistent Total coliform rule (TCR) or Nitrate violations
•  Continuing Boil Water Notice
•  Inadequate individual water supplies documented by District Health Director, Planning District
        Commission, etc. to show health problems.

Chronic Health Priority, SDWA Compliance (30 points). Chronic health problems that affect an
individual over a lifetime.

•  Persistent PMCL Violations for contaminants such as VOC, SOC, IOC, RAD, etc.
•  Lead and Copper Action Levels
•  Significant noncompliance (SNC)

Public Health Priority, Waterworks Regulations Compliance (15 points maximum)
Improvements to infrastructure necessary to bring the waterworks into compliance with the Waterworks
Regulations and to ensure the provision of safe  drinking water such as:

•  Resolving conditions of inadequate quality and quantity of a groundwater source of water supply. (5
points)
•  Ensuring that drinking water receives appropriate treatment to protect the public health. (5 points)
•  Preventing conditions favoring the entrance of contaminants into the distribution system or to provide
adequate storage capacity and pressure, and to reduce leakage.    (5 points)

Affordabilitv—County/City Medium Household Income (20 points maximum). The census median
household income (MHI) is used in order to weigh assistance to those with fewer resources available per
household.

Less than  $22,000 MHI               20 points
$22,000 =< MHI =<$28,000           10 points
$28,000 < MHI =<$33,000             5 points
Greater than $33,000 MHI              0 point

Regionalization (8 pts). State law encourages regionalization; therefore, such efforts  receive additional
consideration.

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Readiness To Proceed (5 points maximum, non-cumulative).  The closer a project is to construction the
more points are awarded to the project. No points allowed for projects funded beginning with grants from
the Federal FY 99 funds.  Readiness to proceed will continue to be considered as a decision factor for
selecting projects to receive funding.

Applicant has hired an Engineer                                      1 point
A Preliminary Engineering Report (PER) has been approved by VDH     2 points
Plans @ VDH                                                      3 points
Plans approved by VDH                                             5 points

Other Funds Available (4 points maximum). Incentive points are assigned to encourage an applicant to
have or seek other funds in addition to the construction loan from the DWSRF program. The percentage is
calculated by dividing the other funds by the total project cost.

Less than 5%                 0 point
5%to=<10%                 1 point
10%to=<15%                2 points
15%to=<20%                3 points
Greater than 20%              4 points

Projected Cost per Connections Served (3 points maximum).  The cost per household is calculated by
dividing the amount of the construction loan from the DWSRF program by the actual number of households
receiving the benefit.

Less than $500/household              3 points
$5 00 to =<$25 00/household             2 points
$2500 to =<$5000/household           1 point
Greater than $5 000/household           0 point

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                                        WEST VIRGINIA
Priority Ranking Criteria

Projects will be prioritized based on points accrued in the following three categories:

•   Public Health - Up to 50 points will be given to projects that address public health issues. Points will be
    awarded based on the seriousness of the health risk, ranging from 50 points for projects to eliminate acute
    health hazards to 10 points for general system improvements. Projects that address multiple health hazards
    may receive points for only the highest classification.

•   Regulatory Compliance - Up to 20 points will be given to projects to address regulatory compliance. For
    example, systems to correct chronic noncompliance will receive 20 points, while projects designed to
    prevent future noncompliance will receive 5 points.

•   Affordability - Up to 30 points may be given to projects based on a comparison of drinking water system
    rates to magisterial district MHI.  Systems with rates greater than 2.0 percent of MHI will receive the
    maximum of 30 points, decreasing incrementally to 5 points for systems with rates between 51 percent and
    1.0 percent.
Notes
    Tie-Breaking Procedure - The system with the highest public health rating will receive priority. If two
    systems remain tied, the system with the smaller population served will be ranked higher.

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                                     WEST VIRGINIA


                                 Project Priority Ranking System

(1)    PUBLIC HEALTH (0 to 50 points - 50 points maximum)

Up to fifty points may be given to a project for public health. The public health categories are listed below.
A particular project may apply to several categories. In such cases, the project will be given the highest
rating.

       (A)    Projects to correct acute health hazards - (50 points)
               Fifty points will be given to projects that propose to eliminate a problem that poses an
               acute, ongoing health hazard to the consumer.  Examples are listed below.

               •    Projects that address documented nitrate or nitrite violations.

               •    Projects that address documented exceedance of primary inorganic MCLs.

               •    Projects that address a problem where a system has been put on the EPA SNC list for
                   turbidity violations.  The project must ensure compliance in order to receive DWTRF
                   assistance.

               •    Projects that address a problem where a system has been put on the EPA SNC list for
                   microbiological violations.  The project must ensure compliance in order to receive
                   DWTRF assistance.

               •    Projects that propose filtration for surface water source that currently does not have
                   filtration.

               •    Projects that propose disinfection for a system that currently  does not have
                   disinfection.

               •    Projects that address documented water outages for extended periods (1 week) due to
                   system or design deficiencies.

       (B)    Correct chronic health hazards - (40 points)
               Forty points will be given to projects that propose to eliminate a chronic health hazard to
               the consumer.  Examples are  listed below.

               •    Projects that address a turbidity violation for a system that has not yet been put on the
                   EPA SNC list.

               •    Projects that address a microbiological violation for a system that has not yet been put
                   on the EPA SNC list.

               •    Projects that address exceedances of the Lead and Copper Rule.

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        •   Projects that address documented exceedances of primary organic MCLs.

        •   Projects that address documented exceedances of radiological MCLs.

        •   Projects that address treatment technologies for the SWTR.

        •   Projects that address documented water outages due to system or design deficiencies.

(C)     Correct periodic health hazards - (30 points)
        Thirty points will be awarded to projects that propose to eliminate a documented health
        hazard which has occurred periodically. Examples are listed below.

        •   Projects that address low chlorine residuals.

        •   Projects that address periodic exceedances of a primary MCL.

        •   Projects that address periodic water outages to some customers for at least a day due
           to design or system deficiency.

        •   Projects to bring existing facilities to current design standards which affect water
           quality: treatment, chemical application, pumping facilities, finished storage and
           distribution systems.

(D)     Correct potential health hazards - (20 points)
        Twenty points will be given to projects that propose to eliminate potential health hazards.
        Examples are listed below.

        •   Projects for line extensions to areas with poor water quality or limited quantity.
        •
           Projects to develop new source to augment existing sources where there is no other
           health hazard associated with the project. Dams and reservoirs are not eligible.

        •   Projects for installation / upgrade of waste disposal facilities.

(E)     System Improvements - (10 points)
        Ten points will be given to projects that propose general system improvements.  Examples
        are listed below.

        •   Projects to replace / repair old, undersized, or malfunctioning equipment.
        •
           Projects to replace leaking water line.

        •   Projects to improve aesthetic quality of the water such as iron, manganese, taste and
           odor.

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(2)     REGULATORY COMPLIANCE (0 to 20 points - 20 points maximum)

       (A)     Correction of chronic non-compliance - 20  points

               •   Compliance with administrative orders, agreements, statutes, or regulatory deadlines

       (B)     Compliance with periodic and potential non-compliance - 10 points

               •   Compliance with sanitary survey recommendations, NPDES permits, new regulations,
                  or design standards.

       (C)     Protection against non-compliance - 5 points

               •   Compliance with proposed regulations.

       (D)     Line extensions with documented cases  of fecal coliform - 3 points


(3)     AFFORD ABILITY (0 to 30 points)

               Rates = 0% to 0.5 % MHI             ( 0 points)
               Rates = 0. 5 1  % to 1. 0% MHI        ( 5 points)
               Rates = 1. 0 1  % to 1. 5% MHI        (20 points)
               Rates = 1. 5 1  % to 2. 0% MHI        (25 points)
               Rates > 2.0% MHI                   (30 points)

              Note:   MHI = median household income by  magisterial district as published by the
                      West Virginia Infrastructure and Jobs Development Council.
                      Rates based on 4500 gallons.

       Public Health      	
       Compliance       	
       Affordability      	
       Total Points

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Tie Breaker:
In the event that two systems have the same score the following will be used as the tie breaker:

1.      Whichever system has the highest public health rating will be ranked higher.

2.      In the event there is still a tie, then the system with the lower population served will be ranked
       higher.

       The list of eligible projects that are expected to receive assistance from the DWTRF for the 1997
       fiscal year is enclosed as Attachment 3. This list includes the name of the public water system,
       description of the project, priority assigned, the expected financial terms, and size of community
       served.  These projects are considered the 1997 Project Priority List to receive financial assistance
       from the DWTRF. A project must first be  determined to be technically and financially feasible by
       the Water Technical Review Committee and the Funding Committee of the West Virginia
       Infrastructure and Jobs Development Council. Approval from the West Virginia Infrastructure and
       Jobs Development Council is required for any project to receive DWTRF funding assistance.

Bypass Procedure

       After all projects are ranked in order of priority the following procedure will be used to determine
       those that will receive financial assistance from the DWTRF.

1.      There is a federal requirement that at least  15 % of the construction funds be used for small
       systems which serve less than 10,000 persons. Annually, an amount up to 15  % of the funds will be
       assigned to small systems starting at the top of the priority list.

2.      The remainder of the funds will be assigned in order of priority on the priority list.

3.      The following provisions will be used to bypass a project on the priority list or amend the
       priority list and fund another project on the comprehensive  list.

       (1)     The project is for a system that is defined as a Significant Non-Complier (SNC) per
               the Safe Drinking Water Act and the project will not ensure compliance.
       (2)     The project is for a system that does not have properly certified operators to operate
               and maintain the system.
       (3)     The project has been funded by another entity,
       (4)     The project has had  a change in scope,
       (5)     The project is unable to proceed in a timely manner,
       (6)     All other funding is not committed,
       (7)     The project costs exceed the anticipated loan amounts,
       (8)     The system declines the assistance,
       (9)     The project is not certified as technically and financially feasible by the West Virginia
               Infrastructure and Jobs Development Council (WVIJDC) Water Technical Review and
               Funding Committees.
       (10)    The project is unable to meet the schedule developed and agreed upon by the project
               sponsor and the Bureau for Public Health.
       (11)    Other situations that cannot be foreseen that the Bureau for Public Health determines will
               delay the loan assistance.
       (12)    A project previously ranked below attains a higher rating due to revised information.

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        When a project has been bypassed, the water system will be given written notice that it has been
bypassed and will not be funded with DWTRF funding for that year. The project may be applied to the
next years' priority lists. The Bureau for Public Health will work with those projects that have been
bypassed to ensure, to the maximum extent possible, that the project will be eligible in the following year.

        In such cases where a project is bypassed, the next project on the list will be funded within the
funds available and the criteria outlined in this section. If a funded project comes in under cost, the
remaining funds may be used to fund the next project on the priority list provided that the cost does not
exceed the available funds.

Rational for different assistance

        Loans will be offered at 2% for up to 20 years plus a 1% administrative fee.  To qualify for loans
at an interest rate less than 2% or extended loan terms up to 30 years, the proposed user rates for 4,500
gallons must be equal to or greater than 11/2% of the median household income (MHI).  In
such cases the interest rate will be reduced to keep user rates as close to 1.5% of the MHI as possible. The
MHI is defined by magisterial district and is enclosed as Attachment 1.

        Funds from the 1% administrative fee must be kept in a separate, non project account.  The monies
can only be used for purposes directly related to the DWTRF program and must be properly accounted for
in the annual audit.

        The long term impact of these funding decisions will be that after initial capitalization years (2004)
the fund will be receiving approximately $3 million in repayments that year (2004) for funding additional
projects.

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                                             ALABAMA
Priority Ranking Criteria

Projects will be prioritized based on points accrued in the following seven categories:

•   Violations of National Drinking Water Standards - Projects for systems with MCL exceedances during the
    30-month period prior to pre-application submittal (3 years for secondary contaminants) may receive up to 40
    points for each item that applies in this category (e.g., 40 points for more than 2 bacteriological violations, 20
    points for MCL exceedances of secondary standards, 5 points for 1.0 - 5.0 mg/L of nitrate).

•   Quantity Deficiencies - Projects for systems with quantity deficiencies or shortages due to water source or
    storage may receive between 5 and 30 points for each item that applies in this category (e.g., 30 points for
    continual shortages, 5 points for inadequate storage without implemented conservation program).

•   Treatment/Design Deficiencies - Projects for systems with design deficiencies that could be corrected by
    enlargement, repair, installation, or replacement of the system or a portion of the system may receive between
    10 and 30 points for each item that applies in this category (e.g., 30 points for no filtration for surface water or
    groundwater under the influence of surface water, 12 points for inadequate treatment or process facilities). In
    addition, projects may receive  10 or 15 bonus points  if they have committed to or implemented a source water
    protection plan or delineated source water areas and  assessed contaminants.

•   Affordability Factor - Projects will receive points based on the relative needs of applicants on a per household
    basis. The number of points is determined by the ratio of the average annual household water bill to the 1997
    MHI for the project area multiplied by 100 (e.g., 24 points if the number is greater than 2.0, 3 points if the
    number is less than or equal to 0.5).

•   New Customer Connections  Served - Projects will receive between 10 and 26 points based on the number of
    new customer connections that they will serve (e.g., 26 points for more than 600 new connections, 10 points for
    fewer than 20 new connections).

•   Consolidation - Projects which result in the consolidation, interconnection, or improvement of services for two
    or more drinking water systems may receive between 10 and 50 points depending on the action being taken
    (e.g., 50 points for total system consolidation, 10 points for improvement of services).

•   Benefit/Cost Factor - Projects will receive between 2 and 22 points depending on the factor resulting in
    dividing the number of benefiting connections by the amount of the DWSRF loan in millions of dollars (e.g., 22
    points if the factor is greater than 10,000; 2 points if the factor is between 0 and 25).
Notes
    Tie Breaking Procedure - In the event of a tie, priority will go to the project with the smallest number of
    existing customers served.

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                                          ALABAMA


335-7-13-.10 Criteria for Project Loan Priority.

    (1)  Each year, the Department shall develop a project priority list in accordance with the SDWA for the
        forthcoming fiscal year. The criteria for ranking projects gives priority to projects that: 1) protect
        public health, and return systems to compliance; 2) benefit the most people per dollar expended; 3)
        assist systems most in need on a per household affordability basis; and 4) use consolidation with
        other systems to correct existing deficiencies and improve management.  Each year, the project
        priority list shall be the subject of a public notice, including a public comment period. Water systems
        desiring to place a project on the list shall make their request for placement by May 1 of each year, or
        as otherwise established by the Department.  Those projects will be ranked in accordance with the
        priority system and placed on the list. The pre-application, in the form of an Engineering Report,
        shall be submitted by the authorized representative of the water system with a request for placement
        on the list:

        (a)  Brief description of the project;

        (b)  Brief description of existing deficiencies (for example, low pressure, inadequate treatment,
            bacteriological contamination, etc.);

        (c)  Number of customers for entire water system;

        (d)  Number of customers for project area;

        (e)  Estimated costs associated with the project including planning and design expenses;

        (f)  Financial information summary including, but not limited to, the following:

            1.  Annual operations and maintenance cost estimates;

            2.  Total existing water system debt obligations;

            3.  Total annual revenues;

            4.  Most recent financial statement;

            5.  Existing water service rates and proposed increases;

            6.  Average annual customer water bill based on historical usage; and

            7.  Median household income for project area;

            8.  Where one or more project option exists, projected costs for each option.

        (g)  Engineering Report as described in Rule 335-7-4-.04, unless otherwise directed by the
        Department; and

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(h)  Benefits of pollution prevention or water shed enhancement project.

    Each project considered eligible for assistance shall be assigned a point rating (P) computed
    according to the following formula:

    P = A+B+C+D+E+F+G

    Where:

       A= Violations of National Drinking Water Standards

       B= Quantity Deficiencies

       C= Treatment Deficiencies

       D= Affordability

       E= New Customers Served

       F= Consolidation

       G= Benefit/Cost

    A = Violations of National Drinking Water Standards

       Maximum Contaminant Levels (MCLs) are established by the EPA for those contaminants
       that may be detrimental to public health. Exceedances of these levels during the 30-month
       period prior to pre-application submittal (3 years for secondary contaminants) carry the
       following weightings:

                   Condition                                      Priority Points
     a. Bacteriological
            1.    No MCL violations                                     0
            2.    1-2 MCL violations                                    30
            3.    Greater than 2 violations                                40
     b.   Nitrate
            1.     <1.0mg/L                                            0
            2.     1.0B5.0mg/L                                        5
            3.     5.0B10.0mg/L                                       20
            4.     MCL violations                                       40
     c.   Turbidity in the last 30 months
            1.    No MCL violations                                     0
            2.    1-2 MCL violations                                    30
            3.    Greater than 2 violations                                40
     d.   Primary Organic, Inorganic, and Radionuclide Standards
          1.       No MCL violations during last 2 monitoring               0
                  periods
         2.       1-2 violations                                          30
         3.       Greater than 2 violations                                40

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     e.   Total Trihalomethanes (TTHM)
          1.       No MCL violations during last 2 monitoring               0
                  periods
          2.       1-2 violations                                          30
          3.       Greater than 2 violations                                40
     f.    Secondary Standards B MCL exceedances                         20
     g.    Boil Water Status in the last 3 years                               30
     h.    Lead or Copper Exceedance                                      30


B = Quantity Deficiencies.      Quantity deficiencies or shortages due to water source/storage.

                             Condition                            Priority Points
         Adequate quantity for the present                                  0
     Source
          Continual Shortage                                            30
          Shortage during peak demands (daily)                            20
          Shortage during seasonal high use with an implemented             15
          conservation program.
          Shortage during seasonal high use without an                      5
          implemented conservation program
     Storage (less than 24 hrs available based on average demand)
          Inadequate storage with implemented conservation                 20
          program
          Inadequate storage without implemented conservation              5
          program
     Pressure
          Consistently < 20 psi                                           30
          Occasionally < 20 psi                                           15

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C = Treatment/Design Deficiencies. Design deficiencies are those which could be corrected by
enlargement, repair, installation or replacement of all or a portion of the system.

                             Condition                           Priority Points
     No filtration of surface water or groundwater under the                 30
     influence of surface water
     No filtration of groundwater with the following raw water
     quality referenced in 335-7-5-.20 Administrative Code
            1. Turbidity > 5.0 NTU                                      25
            2. Total Coliform > 100 per 100 ml of sample                  20
            3. Fecal Coliform > 20 per 100 ml of sample                   25
            4. Iron>0.6mg/L                                          15
            5. Iron>0.3<0.6mg/L                                      10
            6. Manganese > 0.1 mg/L                                    15
            7. Manganese >0.05 <0. Img/L                               10
     Inadequate treatment or process facilities                              12
     Distribution or plant capacity deficiencies                             12
     Improper well construction                                          12
     Other contaminants of concern such as cryptosporidium or              25
     Giardia with monitoring or studies to demonstrate existence or
     high potential for occurrence
     Bonus Points:
     System has implemented or committed (by letter) to                    15
     implementing a source water protection program
     System has completed or in process (by letter) of delineating            10
     source water areas and assessing contaminants.
D = Affordability Factor. An affordability factor will be assigned to each project to reflect the
    relative needs of applicants on a per household basis. The affordability factor is defined as
    the ratio of the Average Annual Household water bill to the 1997 median household income
    for the project area.

                             Condition                           Priority Points
     Average annual household water bill                                X  100
     Median household income of project area
           a. >2.00%                                                  24
           b.  1.76 B 2.00                                               21
           c.  1.51- 1.75                                                18
           d.  1.26 B 1.50                                               15
           e.  1.01- 1.25                                                11
           f  0.51- 1.00                                                7
           h. < or = 0.5                                                 3

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E = New Customer Connections Served.

                            Condition                          Priority Points
     New customer connections the project will serve:
           a. < 20 connections                                         10
           b. 21-50                                                  12
           c. 51-100                                                 14
           d. 101-150                                                16
           e. 151-200                                                18
           f. 201-300                                                20
           g. 301-400                                                22
           h. 401-600                                                24
           i. >600                                                   26
F = Consolidation. Projects which result in the consolidation, interconnection, or improvement
    of services for two or more drinking water systems, will have the following weighted factor.

                             Condition                         Priority Points
       No consolidation                                                 0
       Total system consolidation                                       50
       Physical interconnection                                         30
       Management consolidation                                       20
       Improvement of Services (managerial, operational, and               10
       financial)
G = Benefit/Cost Factor.       Benefit/Cost points assigned to each project will be determined
    using the following formula:

    Benefit/Cost Factor =         Number of benefiting connections
                                 Amount of DWSRF Loan (in $1.0 millions)

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    Applicants must furnish information (including hydraulic analyses, if necessary) to support their
    estimate of the number of benefiting connections. The amount of DWSRF loan is in millions of
    dollars.

                              Condition                           Priority Points
            a. factor > 10,000                                             22
            b. factor 3,001 to 10,000                                      20
            c. factor 1501 to 3,000                                        18
            d. factor 801 to 1,500                                         16
            e. factor 501 to 800                                           14
            f. factor 301 to 500                                           12
            g. factor 201 to 3 00                                           10
            h. factor 121 to 200                                           8
            i. factor 61 to 120                                             6
           j. factor 26 to 60                                              4
            k. factor 0 to 25                                              2
(2) The priority list shall be divided into a fundable and extended portion.  The fundable portion
    shall include those projects anticipated to be funded from the projected available loan funds for
    the applicable period.  The extended portion shall include those projects anticipated for funding
    from future projected loan funds.

(3) Following completion of the ranking process, the priority list will be reviewed to determine if at
    least 15% of amount projected to be funded is for public water systems which regularly serve
    fewer than 10,000 people, as required by the SDWA. If this is not the case, the priority list will
    be adjusted by exchanging the lowest ranking projects above the funding line that serve 10,000
    or more with the highest ranking projects below the funding line that serve fewer than 10,000,
    until the 15% requirement is satisfied.

(4) When two or more projects score equally under the project priority system, a tie breaking
    procedure will be utilized. The project with the smallest number of existing customers served
    will receive the higher ranking.

(5) A project on the fundable portion of the list may be bypassed and the next eligible project funded
    if it is determined that the project will not be ready to proceed during the funding year.  The
    applicant whose project is to be bypassed will be given written notice by the Department.
    Projects that have been bypassed may be funded at a later date when the project is ready to
    proceed.

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                                              FLORIDA
Priority Ranking Criteria

Projects will be prioritized based on points accrued in the baseline and affordability categories below.  Each
project will be assigned points from one of the baseline point categories.  Then, points from all three
affordability categories will be added to the base score.

Baseline Point Categories - If a project comprises components qualifying for different baseline point scores, the
project will receive the highest number of points for which at least 50 percent of the estimated project costs qualify.
If no single component generates 50 percent of the cost, the cost of the highest priority component will be combined
with the cost of a lower priority component to make 50 percent and the project will receive the points attributed to
the lower priority component. Noncompliance and public health risks documented in the 48-month time period prior
to applying for a loan are used to rank projects.
•   Acute Public Health Risk - Projects that address documented acute public  health risks such as fecal coliform
    and E. Coli MCL exceedances or failure to meet SWTR requirements will receive 800 points.

•   Potential Acute Public Health Risk - Projects that address documented potential acute public health risks such
    as total coliform MCL exceedances or violations of disinfection requirements will receive 700 points.

•   Chronic Public Health Risk - Projects that address documented chronic public health risks such as primary
    chemical contaminant MCL exceedances (except nitrate, nitrite, and total nitrogen) or trihalomethane MCL
    exceedances will receive 600 points.

•   Potential Chronic Public Health Risk - Projects that address documented  potential chronic public health risks,
    such as exceedances of 50 percent of an MCL value for primary chemical contaminants (except nitrate, nitrite,
    and total nitrogen) or exceedances of 80 percent of an MCL value for trihalomethanes, will receive 500 points.

•   Compliance - Projects that address SDWA compliance and other enforceable requirements such as secondary
    contaminant violations or lack of required facilities to enable compliance will receive  100 points.

•   Other - Projects that are not addressed in the  above categories, such as water softening treatment or computer
    facilities, will receive 100 points.

Affordability Point Categories
•   MHI - Projects will be given affordability points based on the extent to which a community's MHI falls below
    the statewide average using the formula: MHI score = 200 x (1.00 - MHI fraction) where the MHI fraction is the
    MHI estimate for the project service area divided by the statewide average MHI.  The maximum points that a
    project may receive is 100 points, and the number will be rounded to the nearest tenth of a point.

•   Population - Projects will receive affordability points based on the formula: 50 - (P/1,000), where  P is the
    population of the project's service area.  Points will be rounded to the nearest tenth of a point.

•   Consolidation - Projects will receive  15 points for each public water system serving 500 or fewer persons that
    is consolidated or regionalized. The maximum score that a project may receive is 45 points.

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Notes:
    Tie-Breaking Procedure - In the event of a tie, priority will go to projects whose application has the earliest
    postmark or date of receipt.

    Funding Ceilings - No single project listed on the fundable portion of the priority list may receive more than 25
    percent of the DWSRF capitalization grant per year for construction loans or more than $1,000,000 for pre-
    construction loans unless the project is based, in part, on consolidation or regionalization, in which case the
    maximum will be $1,500,000.

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DEP 1998     STATE REVOLVING FUND PROGRAM FOR DRINKING      62-552
                              WATER FACILITIES
      62-552.650  Priority Determination.
     (1)    The priority system for financial assistance is based on public health
considerations, compliance with the Act or other enforceable requirements relating to
drinking water systems, and affordability. Affordability includes the evaluation of
median household income, population affected, and consolidation of very small public
water systems which serve a population of 500 people or fewer. The baseline priority
score shall be determined as set forth in subsections (2), (3), and (4) below. The
affordability score shall be determined as set forth in subsection (5)  below and shall be
added to the baseline score. Special consideration shall be given, in the form of the
cost-effectiveness preference under rule 62-552.700(2), F.A.C., to projects in areas
where salt water intrusion jeopardizes adequate supplies of safe drinking water.
     (2)    Each project,  or component of a project when a project has components
qualifying for different baseline priority scores, shall be assigned a baseline priority
score to indicate protection of public health, compliance with the Act or other
enforceable requirements, or another lower priority need. When a project has
components qualifying for different baseline priority scores, the score for the entire

Effective 8-10-98

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DEP 1998     STATE REVOLVING FUND PROGRAM FOR DRINKING      62-552
                              WATER FACILITIES
project shall be the highest number of points for which at least 50% of the estimated
project costs qualify. When no single project component generates at least 50% of the
estimated project costs, the cost of the highest priority component shall be combined
with one or more lower priority component costs, at the lowest number of points
associated with any of the combined components, to achieve the 50% threshold and
thereby establish the overall project baseline priority score.
     (3)     Compliance monitoring results for public water systems or County Health
Department sampling results for other supply, treatment,  or distribution systems during
the 48-month period immediately preceding the date upon which a request for inclusion
is submitted under rule 62-552.600(1) or rule 62-552.680(1 )(a)2., F.A.C., shall be used
to justify public health and compliance baseline priority scores involving a comparison
to a maximum contaminant level (MCL) or other numerical standard relating to drinking
water quality. A certification by the State Health Officer of the existence of a public
health risk during the referenced 48-month period also shall justify a public health
baseline priority score.
     (4)     Baseline priority scores shall be assigned to projects that will eliminate
any of the following conditions or satisfy the Florida Administrative Code requirements
cited below:
     (a)     Acute public health risk sub-category projects shall be assigned a
baseline priority score  of 800 points when the following is documented.
     1.     Exceedance of the fecal coliform or E. Coli MCL value as set forth in rule
62-550.310(3)(b),  F.A.C.;
     2.     Failure to meet the surface water treatment or disinfection requirements of
rules 62-550.560 and 62-555.600 through 62-555.630, F.A.C., commonly  known as the
Surface Water Treatment Rule;
     3.     Exceedance of a lead or copper action level as set forth in Title 40 of the
Code of Federal Regulations, part 141, sections 80 through 91 (1995) for  two (2)
successive monitoring periods; or
     4.     Exceedance of a nitrate, nitrite or total nitrogen MCL value as set forth in
rule 62-550.310(1), F.A.C. For public water  systems, an exceedance shall be
established according to the monitoring requirements of rule 62-550.512,  F.A.C.
     (b)     Potential acute public health risk sub-category projects shall be assigned
a baseline priority score of 700 points when the following is documented.
     1.     Exceedance of the total coliform MCL value as set forth in rule 62-
550.310(3)(a), F.A.C.;
     2.     Violation of the disinfection requirements under rule 62-555.320(4),
F.A.C.;
     3.     Exceedance of 50% of a nitrate, nitrite or total nitrogen MCL value as set
forth in rule 62-550.310(1), F.A.C;
     4.     Treatment or disinfection facilities are needed to enhance compliance
with the Surface Water Treatment Rule; or
Effective 8-10-98

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DEP 1998     STATE REVOLVING FUND PROGRAM FOR DRINKING      62-552
                              WATER FACILITIES
     5.     A certification is made by the State Health Officer that an acute public
health risk exists as a result of contaminants for which the Department has no
established standards for water supplies and the proposed project will eliminate the
risk.
     (c)    Chronic public health risk sub-category projects shall be assigned a
baseline priority score of 600 points when an exceedance of an MCL value for the
following is documented.
     1.     Primary chemical contaminants (except  nitrate, nitrite, and total nitrogen)
identified in Tables 1, 2, and 3 of chapter 62-550, F.A.C.;
     2.     Trihalomethanes identified in rule 62-550.310(2)(a), F.A.C.; or
     3.     Radionuclides identified in rule 62-550.310(4), F.A.C.
     (d)    The potential chronic public health risk sub-category projects shall be
assigned a baseline priority  score of 500 points when the following is documented.
     1.     Exceedance of 50% of an MCL value for primary chemical contaminants
(except nitrate, nitrite, and total nitrogen) identified in  Tables 1, 2, and 3 of chapter 62-
550, F.A.C.; or
     2.     Exceedance of 80% of an MCL value for trihalomethanes identified in rule
62-550.310(2)(a), F.A.C.; or
     3.     A certification is made by the State Health Officer that a chronic public
health risk exists as a result of contaminants for which the Department has no
established standards for water supplies and the proposed project will eliminate the
risk.
     (e)    The compliance with the Act and other enforceable requirements category
projects shall be assigned a baseline priority score of 300 points when any of the
following is documented.
     1.     Violation of any secondary contaminant  standard found in Table 4 of
chapter 62-550, F.A.C.
     2.     Required facilities do not currently exist  or must be provided to enable
compliance with rules of the Department. The situations requiring compliance are listed
below:
     a.     Requirements for the minimum number of wells in rule 62-555.315(1),
F.A.C.;
     b.     Well set-back and construction requirements of rules 62-555.312  and 62-
555.315, F.A.C., respectively;
     c.     Treatment, storage, power, and distribution requirements of rule 62-
555.320, F.A.C.; and
     d.     Cross connections and backflow control requirements of rule 62-555.360,
F.A.C.
     (f)     A separate category having a baseline priority score of  100 points shall
be assigned to all other projects that cannot be categorized under paragraphs (a)
through (e) above.  Examples of such projects are water softening treatment and
computer or laboratory facilities.

Effective 8-10-98

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DEP 1998     STATE REVOLVING FUND PROGRAM FOR DRINKING       62-552
                              WATER FACILITIES
     (5)    In addition to the assignment of a baseline score, each project shall be
awarded points based upon the three affordability criteria outlined below. These points
shall be added to the baseline category score to determine the total priority score for
the project.
     (a)    A median household income (MHI) score shall be derived based on the
extent to which a community's MHI falls below the statewide average. Data used to
determine the score shall be from the most recent decennial census or from verifiable
estimates provided by the project sponsor. Household income data shall be
representative of all areas to be served by the proposed project.  The score is based on
the following formula:
     MHI score = 200 x (1.00 - MHI fraction)
Where the MHI fraction is the MHI estimate for the project service area divided by the
statewide average MHI. This score shall not exceed a maximum  of 100.0 points and
shall be rounded to the nearest tenth of a point.
     (b)    Projects for small systems are generally less affordable than those for
larger systems because of the limited rate base from which to recover costs.  These
systems also often have difficulty complying with the Act.  Thus, special consideration
will be given to such projects based on population. The population score is based on
the following formula:
     Population score = 50.0 - (P/1,000)
Where P is the population of the project's service area. The minimum score shall be 0.0
points and shall be rounded to the nearest 0.1 point.
     (c)    Because very small public water systems often experience difficulty
complying with the regulatory requirements, a consolidation score will be used to reflect
a project's consolidation or  regionalization of such systems. For each project which
consolidates or regionalizes public water systems serving 500 or fewer persons, an
additional 15 points for each such system will be awarded. However, the consolidation
score shall not exceed 45 points regardless of the number or consolidated or
regionalized systems.
Specific Authority 403,8532, FS.
Law Implemented 403.8532, FS.
History- New - 4-7-98.
Effective 8-10-98

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                                             GEORGIA
Priority Ranking Criteria

Projects will be prioritized based on points accrued in the following three categories:

•   Protection of Public Health through compliance assurance - A maximum of 350 points will be given for
    projects that seek to protect public health. Projects that supply safe drinking water to an existing privately-
    owned PWS that demonstrates or may demonstrate non-compliance with current or future regulations will
    receive 350 points.  Projects that supply safe drinking water to a new or proposed development project that
    will serve people year round will receive 250 points. Projects may receive points for only one item.

•   Environmental Criteria - A maximum of 300 points may be  given to  projects that seek to correct
    environmental problems.  Projects needed to bring a PWS into compliance with  the SDWA, correct acute
    contaminant violations, or correct deficiencies causing a chronic health  threat would receive 300 points.
    Similarly,  200 points would be given for projects designed to address primary or secondary drinking water
    quality standards.  Projects may receive points for only one item.

•   Financial  Management and Need - A maximum of 150 points may be given for projects that assist fiscally
    responsible and financially  strapped systems.  Projects may receive points for all items that apply in this
    category.  Assessment of financial management  is based on reporting procedures and ratios (coverage and
    operating).

Notes

Funding Ceiling - A maximum of $2.0 million may be received by a single community per calendar year, per
federal appropriation unless other suitable projects are not available.

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                                       GEORGIA
PROJECT RATING AND SELECTION CRITERIA
(Maximum Point Total - 1,000 Points)

The projects will be rated in five (5) categories to determine their eligibility and selection for funding
under the DWSRF

1)     Protection of Public Health through Compliance Assurance (maximum 350 points)
2)     Environmental Criteria (maximum 300 points)
3)     Project Readiness (maximum 200 points)
4)     Financial Management and Need (maximum 150 points)
5)     Community and Regional Enhancement (maximum zero points)
1.  Protection of Public Health Through Compliance Assurance
(Only one applicable ~ maximum 350 points)

Protect public health by supplying safe drinking water from a Qualified Local Government or a Water
Authority within a certified government to an existing privately-owned public water system that
demonstrates or may demonstrate non-compliance with the current or future state and federal drinking
water regulations.                                                                        350

2.  Environmental Criteria
(Only One Applicable - Maximum 300 Points)

Protect public health by supplying safe drinking water to any new or proposed development
project that will serve people living year-round.                                               250

Project needed to bring public water system into immediate compliance with the SDWA
regulations.                                                                             300

Project needed to correct "acute" Microbial, D/DBPs, and Corrosion By-Products Violations.       300

Project needed to correct deficiencies that are posing "chronic" health concerns.                    300

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Infrastructure improvements and/or modifications to provide safe drinking water.  These include
installation, -replacement or rehabilitation of new or aging water sources, treatment facilities and processes,
pumps, storage, transmission and distribution, and other pertinent infrastructure
needs.                                                                                    275

Development of alternate and/or additional water sources.                                      250

Water plant Improvements/upgrade to improve water quality in conformance
with the primary or secondary drinking water quality standards.                                 200

Land acquisition needed for a planned infrastructure improvement.                              175

3)  Project Readiness (Only One Applicable ~ Maximum 200 Points)

Plans and specifications and all necessary construction permits approved by EPD
(including all bid items, land disturbing activity, DOT & railroad permits, etc.)                    200

Final plans and specifications conditionally approved by EPD. Applicable permit
applications for the construction are issued.                                                   175

Complete plans and specifications submitted to EPD for review.                                 150

Project design -development report (DDR) or equivalent (i.e. Engineering Report)
approved by EPD; schedule for completion of final plans and specifications.                      100

Project design development report (DDR) submitted to EPD.                                    75

Project design under contract. Planning completed and approved by EPD.                        50

Engineering Report (ER) submitted to EPD.                                                   25

4) Financial  Management/ Need (Maximum 150 Points)

       A.      Financial Reporting (maximum 55 points)

       GFOA Certificate of Achievement                                                   55
       GAAP Audit                                                                      20
       GAAS Audit                                                                      20

       B.      Financial Operation (maximum 95 points)

       Coverage Ratio (> 150%)                                                           70
       Operating Ratio (> 120%)                                                          25

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5) Community and Regional Enhancement (0 Points)

Project associated solely with future growth                                                     0
Project associated solely with fire protection                                                    0
Project associated solely with operation and maintenance expenses                                0
Project associated solely with laboratory fees for routine monitoring                               0
Project associated solely with water rights                                                      0
Projects associated with purchase or construction of dams or reservoirs                            0
(Excluding finished water reservoirs)

       Projects or parts of projects that may not qualify for loans under DWSRF may be eligible for loans
under existing State-backed loan programs currently administered by GEFA.

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                                             KENTUCKY
Priority Ranking Criteria

Projects will be prioritized based on points accrued in the following five categories.

•   Resource Development - Projects to obtain and maintain financial, managerial, and technical capabilities to
    comply with the SDWA may receive points for each criterion that applies in this category.  Between 10 and 25
    points will be given (based on the population served by the systems) for consolidation, between 5 and 25 points
    for interconnections, and 15 points for source water quantity and quality correction.

•   Water Treatment - Projects to implement treatment techniques to obtain compliance with the SWTR and the
    NPDWR may receive points for each contaminant technique criterion that applies in this category. Between 20
    and 25 points will be given to address microbiological and turbidity problems (e.g., 20 points for finished water
    turbidity, 25 points for CT removal requirements).  Between 10 and 20 points will be given to implement best
    available technologies (e.g., 10 points for secondary contaminants, 20 points for VOCS, lOCs, SOCs, and
    radionuclides).

•   Water Distribution - Projects to improve infrastructure to obtain compliance with the SWTR, TCR, LCR, or
    the Asbestos Standard may receive points for each criterion that applies in this category. Ten points will be
    given to address each pressure and quality problem.

•   Public Health Protection - Projects to extend water lines to serve an area where households have insufficient
    financial and technical capabilities to maintain water supply systems that comply with the SDWA will receive
    10 points.

•   Financial Health Need - Projects that serve communities with an MHI less than 80 percent of the State median
    will receive 4 points, while those that serve communities with an MHI of 80 percent or more of the State median
    will receive 2 points (if the MHI is less than the State median MHI).
Notes
    Tie Breaking Procedure - In the event of a tie, projects for systems that serve fewer than 10,000 people are
    given higher priority than those that serve more than 10,000 people.  If there is still a tie, the higher priority
    goes to the system with the lowest DWSRF project cost per household (that benefits from the project).

    Restrictions - Certain point categories have restrictions depending on the type of contaminant (e.g., new water
    treatment plants are limited to finished water turbidity concerns), the percentage of infrastructure included (e.g.,
    points for inadequately sized water lines are only allowed when the need applies to at least 20 percent of all
    waterlines), the time needed (e.g., for inadequate distribution storage), etc.

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                          KENTUCKY - DIVISION OF WATER
                       DRINKING WATER SUPPLY REVOLVING FUND
                    PRIORITY SYSTEM (1997 CAPITALIZATION GRANT)
PURPOSE

The Drinking Water Supply Revolving Fund (DWSRF) Priority System was developed to prioritize eligible
projects for funding from the DWSRF to facilitate a Public Water System's (PWS) ability to obtain and
maintain financial, managerial, and technical capabilities for compliance with the Safe Drinking Water Act
(SOWA) which includes compliance with existing and future national drinking water standards or otherwise
significantly further the health protection objectives of the SDWA.

METHODOLOGY

The structure of the priority system incorporates existing initiatives of the SDWA (Financial, Managerial,
and Technical Capacity - Surface Water Treatment Rule -  Total Coliform Rule -Lead and Copper Rule -
Asbestos Standard - Best Available Technology) and also  allows for incorporation of future initiatives
(Capacity Development - Enhanced Surface Water  Treatment Rule - Disinfectants and Disinfection
Byproducts Rule Groundwater Disinfection Rule - and Best Available and Affordable Technology) with
minor modifications.  Projects are prioritized based on a Priority Formula and a Tie Breaker.

Priority Formula The priority formula focuses on a  Public  Water Supply's financial, managerial, and technical
capabilities to comply with national drinking water standards or to otherwise promote the public health
objectives of the SDWA. Violations of drinking water standards occur primarily as a result of inadequate
infrastructure (which is fundable from the DWSRF) or as a result of poor operation (which is not fundable
from the DWSRF). Therefore, a proactive  approach was developed to set priorities based on infrastructure
needs to achieve and maintain compliance with national drinking water standards or otherwise promote the
public health objectives of the SDWA. A priority system based on violations of drinking water standards
would have been reactive and possibly allowed priorities to be set based on operation deficiencies.

Tie Breaker The tie breaker was developed to consider three factors:

1.  Maintaining priorities to be funded in the order  as set forth by the priority formula;
2.   Expending DWSRF dollars to maximize the benefit toward compliance with the SDWA.
3.   Provide funding of projects that are affordable to the households that benefit from the project.

Although there is an element to the DWSRF program that focuses on smaller systems, that focus was to
assist those systems to comply with the SDWA. A  tie breaker that only focuses on the population of smaller
systems could prioritize a project that would not maintain the intent of the priority formula, not maximize the
use of funds, and be less affordable to individual households.

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APPLYING THE PRIORITY SYSTEM TO PROJECTS

The Division of Water, Drinking Water Branch will assign priority formula points to each of the five
categories (Resource Development - Water Treatment - Water Distribution Extension of Service for Public
Health Protection - Public Water System Financial Need) as described below and listed in the 1997 Project
Priority Formula Table based on information supplied by PWSs and their consultants.  The project priority
points will be the sum  of all points assigned to each of the five categories.

Resource Development

This category allows affordable alternatives for a PWS to obtain and maintain financial, managerial, and
technical capabilities to comply with the SDWA. Projects may include, but not be limited to: intakes, wells,
raw and finished water lines, and pump stations.

       Elimination of Public Water Systems Through Mergers - For example, a PWS (trailer park) with
       their own water supply may not be financially capable of complying with the SDWA.  A possible
       solution includes merger with another willing PWS that has the capabilities to maintain compliance.

       Interconnections - For example, a PWS that has a water treatment plant that needs to be
       rehabilitated, modified, or expanded to comply with the SDWA and meet existing demands may
       determine that a more affordable alternative would be to interconnect with another PWS to replace or
       supplement their water treatment facilities.

       Source Water Quantity and Quality - For example, a PWS is responsible to ensure that sufficient
       quantity (for drought vulnerable PWSs)  and quality (based on existing water treatment capabilities)
       of raw water is available to meet existing demands. An affordable solution may be to  secure a new
       source to replace or supplement the existing source rather than to provide  additional treatment or
       interconnection or merger with another PWS (reservoirs, dams, dam rehabilitation, and water rights
       are prohibited from funding by the DWSRF).

Water Treatment

This category allows a PWS to comply with the Surface Water Treatment Rule (SWTR) and the national
drinking water standards of the SDWA.

       Microbiological and Turbidity - The sub-categories listed allow a PWS to comply with-the bacterial
       and viral contamination standards  of the SWTR.

               "CT Removal Requirements" refers to treatment processes to comply with CT removal
               requirements of the SWTR.  Treatment processes include, but are not limited to: pre-settling
               basins, rapid mix, flocculation, sedimentation, baffling of flocculation and sedimentation
               basins, and chemical feeders for proper coagulation.

               "CT Inactivation Requirements" refers to disinfection techniques to comply with CT
               inactivation requirements  of the SWTR. Disinfection techniques include, but are not limited
               to: pre-chlorination, post chlorination, and baffling of clearwells.

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                "Finished Water Turbidity" refers to filtration processes to comply with turbidity
                requirements of the SWTR. Filtration processes include, but are not limited to: filter media,
                filter surface wash, backwash pumps, filter underdrains, and continuous turbidity monitors.

        Best Available Technologies - The sub-categories listed allow a PWS to comply with chemical
        contamination standards of the SDWA. Treatment processes include, but are not limited to: aeration
        towers, ion-exchange, and iron and manganese removal.

Water Distribution

This category allows a PWS to comply with the Surface Water Treatment Rule (as it relates to disinfection
residual), Total Coliform Rule, Lead and Copper Rule, and the Asbestos Standard. Projects may include, but
not be limited to; installation, refurbishment, or replacement of raw and finished water lines; installation,
refurbishment, replacement, or baffling of potable water storage facilities; pump stations in relation to
storage facilities; elimination of constantly running or hydro-pneumatic pump stations; looping of water lines;
flushing devices; and disinfection booster stations.

Extension of Service for Public Health Protection

This category allows water line extensions to serve an area where households have insufficient financial and
technical capabilities to maintain water supply systems that comply with the SDWA.

Public Water System Financial Need

This category provides additional points based on the median household income of the PWS service area.

Restrictions

Priority formula points are credited absolutely or not at all with the following restrictions:

        1.   New water treatment plants are limited to Finished Water Turbidity - 2(a)(iii) - unless a need for
            best available technology based on raw water quality is demonstrated. Construction of new water
            treatment plants is only allowed to replace existing facilities when the cost of upgrading for
            compliance with the SDWA is not determined to be the best affordable alternative over the
            lifetime of the project or when a public water system demonstrates, for public health protection,
            that existing household water system contamination exists and no other PWS is capable of
            serving the area.

        2.   Expansion of existing water treatment plants is limited to Finished Water Turbidity - 2(a)(iii) -
            unless a need for best available technology based on raw water quality is demonstrated.
            Expansion of existing water treatment plants is only allowed when the flow rates of existing
            plants are reduced to comply with the SDWA resulting in insufficient capacity to meet existing
            demands or when the State institutes a water line extension or water tap-on ban due to
            insufficient capacity to meet peak periods of existing demand.

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        3.   Points for Inadequately Sized Water Lines - 3(a)(i) - are only allowed when the need applies to at
            least twenty (20) percent of all waterlines included in the project and documentation supports
            reduced pressures and flows that have or may result in noncompliance with the Total Coliform.
            Rule or the Surface Water Treatment Rule (as it relates to disinfection residual).

        4.   Points for Leaks, Breaks, or Restrictive Flows Due to Age - 3(a)(iii) - are only allowed when the
            need applies to at least twenty (20) percent of all water lines included in the project and
            documentation supports reduced pressures and flows that have or may result in noncompliance
            with the Total Coliform Rule or the Surface Water Treatment Rule (as it relates to disinfection
            residual).

        5.   Points for Replace Lead, Copper, or Asbestos Cement Lines - 3(b)(iii) - are only allowed when
            the need applies to at least twenty (20) percent of all water lines included in the project and
            documentation supports existing or potential noncompliance with the Lead and Copper Rule or
            the Asbestos Standard.

        6.   Points for Inadequate Distribution Storage - 3(a)(ii) - will not be allowed for additional storage
            in excess of the one day storage need for existing customers.

        7.   Points for Source Water Quality and Availability - 4(a) - are only allowed when the need applies
            to at least fifty (50) percent of the customers connecting to the proposed waterlines.  Note:
            Bacteriological samples submitted ill support of the project need must comply with the sample
            collection requirement as outlined in the state Regulation - 401 KAR 8:200 Section  1(7).
PROJECT PRIORITY LIST DEVELOPMENT

A project priority list is generated for all eligible projects.  The list identifies projects to receive funding from
the 1997 capitalization grant and projects to receive funding from future capitalization grants.

Project Priority

Projects are prioritized based on project priority points.  The higher the points, the higher the priority for
funding. Projects with equal project priority points are differentiated by the tie breaker. The tie breaker first
considers the size of PWSs. PWSs with a population fewer than 10,000 are prioritized higher than PWSs
with a population of 10,000 or more.  The tie breaker then calculates the DWSRF project cost per household
that benefits from the project and assigns the highest priority to the project with the lowest cost per
household.

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PWS Population Fewer Than 10.000 Bypass

Projects from PWSs that have populations fewer than 10,000 will receive priority, to the

extent possible, for funding for at least fifteen (15) percent of the funds available for eligible infrastructure
projects.  These projects will be identified in the priority list. Projects in this category not ready to proceed, as
defined below, will be replaced with the next highest priority project from a PWS that has a population fewer
than 10,000. If no such projects exist, or they are not ready to proceed, then priority will be given to the next
highest priority project identified in the priority list..

Not Ready to Proceed Bypass

Any project that cannot demonstrate readiness to proceed six months after approval of the Commonwealth's
capitalization grant application by the EPA Administrator may be bypassed.  The next highest prioritized
project identified in the priority list then becomes eligible for funding. Readiness to proceed is demonstrated
through the successful completion or progress toward satisfying the DWSRF program requirements
including, but not limited to: County Water Supply Planning requirements, Environmental Assessment and
State Clearinghouse review, Project Design, and Plans and Specifications approval.

DOW:DWB:DWSRF Priority System:08/20/97
                                           KENTUCKY
                                      DIVISION OF WATER
                         DRINKING WATER SUPPLY REVOLVING FUND
                          PROJECT PRIORITY FORMULA TABLE (1997)

The Drinking Water Supply Revolving Fund provides assistance for eligible project expenditures to facilitate
a Public Water System's ability to obtain and maintain financial, managerial, and technical capabilities for
compliance with the Safe Drinking Water Act (SDWA) which includes compliance with national drinking water
standards or otherwise significantly further the health protection objectives of the SD WA.

1. Resource Development

 (a) Elimination of Public Water Systems Through Mergers
        (i) Systems Serving 500 or Fewer Population                     25
        (ii) Systems Serving 501 - 3,300 Population                     20
        (hi) Systems Serving 3,301  - 10,000 Population                  15
        (iv) System is Serving 10,00 1 or Greater Population             10
 (b) Interconnections
        (i) Elimination of Water Treatment Plants                       25
        (ii) Supplement Potable Water Supply                           15
        (iii) Emergency Backup Potable Water Supply                   5
 (c) Source Water Quantity and Quality
        (i) Replace Existing Raw Water Source                         15
        (ii) Supplement Existing Raw Water Source                      15

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2. Water Treatment

 (a) Microbiological and Turbidity
        (i) CT Removal Requirements                                 25
        (ii) CT Inactivation Requirements                              20
        (iii) Finished Water Turbidity                                  20
 (b) Best Available Technologies
        (i) VOCs, lOCs, SOCs, and Radionuclides                      20
        (ii) Disinfection By-Products                                   15
        (iii) Secondary Contaminants                                  10

3. Water Distribution

(a) Pressure
        (i) Inadequately Sized Water Lines                              10
        (ii) Inadequate Distribution Storage                             10
        (iii) Leaks, Breaks, or Restrictive Flows Due to Age              10

(b) Quality
        (i) Inadequate Turnover of Water                               10
        (ii) Inability to Maintain Disinfection Residual                   10
        (iii) Replace Lead, Copper, or Asbestos Cement Lines            10

4. Extension of Service for Public Health Protection

 (a) Source Water Quality and Availability                              10

5. Public Water System Financial Need

(a) Median Household Income less than 80% of the State Median          4
(b) Median Household Income less than the State Median
and 80% or more of the State Median                                   2

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                                            MISSISSIPPI
Priority Ranking Criteria

First, projects will be assigned to a priority class (I-VII). Projects in Class 1 are funded to the extent of
available funds; projects in Classes II through VII are ranked in order (i.e., all Class II projects are ranked
higher than Class III projects, etc.). The system is intended to give highest priority to projects needed to protect
public health.

•   Previous Year Certified Projects: have met all the Priority System requirements but were not funded due
    to lack of funds.

•   Minimum Pressure/Primary Drinking Water Standards Projects: correct deficiencies causing pressure
    failure and MCL violations, which in Mississippi are often related to pressure problems.

•   System Capacity Expansion to Serve Existing Unserved Residences/Businesses: to expand existing
    system capacity or construct new systems to serve existing residences or businesses in currently unserved
    areas.

•   Back-Up Water Supply: for systems with insufficient or non-existent back-up supply sources.

•   Existing Facilities Upgrades: rehabilitation, replacement, or upgrade of equipment to ensure continued
    dependable operation.

•   Secondary Drinking Water Standards: to  provide treatment to bring systems into compliance.

•   Consolidation.

Projects are then prioritized within each classification based on the total priority points accrued in the
following three categories:

•   Benefit/Cost - The number of points given in this category is  equal to the number of benefiting connections
    divided by the total eligible cost of improvements.

•   Need Per Household - Using the figure derived for benefit/cost, multiplied by the affordability  factor (ratio
    of the State MHI to the State MCL) assigned to the project, an adjusted point total will be calculated.

•   Consolidation -  Additional points will be given to projects to consolidate two existing systems.  The points
    given will be the product of the benefit/cost points multiplied by 0.5.
Notes
    Small Systems - Mississippi will amend the priority list if at least 15 percent of funding does not go to
    systems that regularly serve fewer than 5,000 people.

    Tie-Breaking Procedure - Projects for systems in communities with the lowest MHI will be given
    preference.

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                                         MISSISSIPI
                              Drinking Water Systems. Improvements
                                       Revolving Loan Fund
                                         Priority System
A.      Program Funding and Ranking Rationale
                Projects will be scheduled on the fundable portion of the Priority List according to both
                priority ranking and readiness to proceed.  The term "readiness to proceed" means that all
                deadlines  established  in  Section C.  can be met.   If a project cannot reasonably be
                expected to meet these deadlines, then the project will not  be  placed on the fundable
                portion of the Priority List, but rather will be shown on the planning portion of the list. It
                is the Board's judgement as to whether the project can be ready to proceed.  Projects on
                the  fundable portion of the  Priority  List will be  funded  as  soon as they meet all the
                deadlines in Section C. and are ready for loan award

                Project By-pass Procedure: Should any project on the fundable portion of the Priority List
                fail  to comply with the deadlines in Section C., the funds reserved for said project will be
                released and made available to any project(s) on the planning list that are ready for loan
                award on a first come, first served basis.

                Should less than the assumed funds become available, the  funding line will be moved to
                reflect the actual available funds, and projects above this line will be funded as described
                above, without further public review  or comment.  Also, should more than the assumed
                funds become available or if the  assumed funds  exceed the  project amounts on the
                fundable portion of the list, projects on the planning portion of the Priority List that are
                ready to proceed will be  funded on a first come, first served basis within the available
                funds, without further public review or comment.

                Project categories are defined below.  Projects in Category I will be funded each year to
                the  extent the Board makes  funds available.  Projects in Categories II through VII are
                ranked in categorical order.  That  is, all Category  II projects are ranked higher than
                Category III projects, etc. Ranking is established in like manner through all remaining
                categories.  Adjustments will be made as necessary to comply with small community set
                aside provisions of the Federal Safe Drinking Water Act and as  established by the  Board
                [Section  1542(a)(2) of SDWA]. The order of Categories II -  VII  is intended to give
                highest priority to those  projects that address the most serious risks to human health.
                Projects within  each category will be funded as described in  Section B. if they meet
                established Priority System deadlines.

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2.       Category I. Previous Year Certified Projects

       Previous Year Certified Projects.  This category includes projects (both above and
       below the funding line) that are determined by the Department to have met all the
       Priority System requirements, secured approval of all required documents, and
       were substantially ready to receive loans during the previous fiscal year, but were
       not funded because of a lack of improvement loan funds or failure to receive an
       assurance of CDBG, ARC or other matching funds in the previous fiscal year.
       Each year, the Board will normally designate such projects in an amount of up
       to approximately 25  % of the current year's available funds as Category I
       Projects. Providing this special category in FY-98 to fund projects that have been
       certified complete from FY-97 will encourage applicants  whose projects initially
       fall below the funding line to continue meeting all Priority System deadlines.
       Those applicants who continue to meet deadlines in attempting to qualify for
       Category I in FY-98 also provide a pool of projects, ready for loan award in FY
       97, to replace any projects (initially above the funding line) that have their funds
       released for failure to meet deadlines during FY-97.  Within this category,
       projects will be ranked according to the current Priority Ranking Criteria. (There
       will be no Category I this first year of the Improvements  Fund's operation.
       Applicants should, however, be aware of its existence so  that they maintain
       milestone dates to possibly qualify for next year's Category I.).

3.      Category II - Minimum Pressure/Prima Drinking- Water Standards Projects

       Projects to correct deficiencies that result in existing systems routinely  failing to maintain
       minimum  acceptable dynamic pressure  (20psi) and/or projects  to otherwise facilitate
       compliance with Primary Drinking Water Regulations. Experience has shown that failure
       of water systems to maintain minimum acceptable dynamic pressure  is symptomatic of
       major deficiencies that can and have resulted in system contamination. Violations of
       Primary National Drinking Water Regulations' maximum contaminant levels (MCLs) are
       rarely experienced in the State.  One exception is violation of bacteriological contaminant
       levels.   Most  such  violations  are related to failure  of systems to maintain adequate
       pressure.   The State Department of  Health  considers pressure related problems to be
       serious and indicative of problems that are  potentially major threats to public health.
       Deficiencies causing pressure failures may include, but are not limited to, the following:

               a. Insufficient supply source (wells, etc.);
               b. Insufficient treatment capacity;
               c. Insufficient storage (elevated or ground);
               d. Distribution system leakage;
               e. Distribution system inadequacies; and
               f. Worn-out, malfunctioning or inadequate equipment, facilities, etc.

       Projects to correct deficiencies, other than those related to pressure, that result in existing
       water systems  failing  Primary  Drinking Water  Regulations (MCLs) will  also be
       considered Category II projects.

4.      Category III - System Capacity Expansion To Serve Existing Unserved
       Residences/Businesses.

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               Projects to expand existing system  capacity (source, treatment and/or distribution), or
               construct new systems to serve existing residences/businesses in currently unserved areas.

        5.     Category IV - Back-up Water Supply Sources Projects

               Projects to provide additional supply to systems with insufficient or non-existent back-up
               water supply sources.  As a minimum, a system using ground water should be able to lose
               any one of the wells supplying the system and still maintain minimum acceptable dynamic
               pressure (20 psi) throughout the entire system.

        6.     Category V - Existing Facilities Upgrades (Meeting Primary Standards)

               Projects to rehabilitate,  replace, protect or upgrade deteriorated, worn, aged or  obsolete
               equipment, facilities, etc., to assure continued, dependable operation of water systems.

        7.     Category VI - Secondary Drinking Water Standards Projects

               Projects to provide treatment that brings systems into compliance with Secondary Drinking
               Water Regulations.

        8.     Category VII - Consolidation Projects

               Projects to consolidate  separate systems  into a single  system for purposes other than
               included in Categories II through VI.  Consolidation will also be considered in establishing
               priority ranking within all categories.

B.     Priority Ranking Criteria

       The criteria for ranking projects within each category is intended to give priority to projects that: 1)
       benefit the most people per dollar expended;  2) assist systems most in need on a per household
       affordability basis as required by the Safe Drinking Water Act; and  3) use consolidation with other
       systems  to  correct  existing  deficiencies  and improve management.  These considerations  are
       addressed by the Priority Ranking Criteria in the following manner:

       1.      Benefit/Cost

               Benefit/Cost  points assigned  to each project will be  determined using the  following
               formula:

               Benefit/Cost Points =	Number of benefiting
               connections
                                      Total eligible cost of improvements (in $1.0 millions)

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        The number of benefiting connections must be included in the facilities plan submitted by
        the applicant and is defined as the sum of individual connections experiencing deficiencies
        that will be corrected by the improvement and includes residences, businesses, and public
        buildings. Applicants must furnish information (including hydraulic analyses, if necessary)
        to support their estimate of the number of benefiting connections.  The total eligible cost is
        in millions of dollars (i.e., $800,000 = $0.8 M).

2.       Affordability Factor

        An  affordability  factor will be  assigned to each project to  reflect the relative needs of
        applicants on a per household basis. The  Benefit/Cost points  calculated in Section B.I.
        will be adjusted using the affordability factor in the following  formula:

        Adjusted Benefit/Cost Points = (Affordability Factor) x (Benefit/Cost Points)

        The affordability factor used in  the calculation is defined as the ratio of the 1995 median
        household income for the  State of Mississippi ($28,077) to  the  1995 median  household
        income for the affected community and will be no less than 1.0  and no greater than 1.5.
        Median household incomes to be used in  the calculations will be those displayed in the
        publication "The Sourcebook  of Zip Code  Demographics" Tenth Edition. Where the
        affected community is included in more than one zip code area, an average will be used for
        the community's median household income.

3.       Consolidation

        Any project that includes consolidation (ownership and management) of separate existing
        systems  into a single system will receive consolidation points  equal to 0.5  times the
        Benefit/Cost points assigned to the project.  The purpose of assigning consolidation points
        is to promote reliability, efficiency and economy of scale that can be achieved with larger
        water  systems  while discouraging the proliferation of numerous separate small systems
        with their inherent inefficiencies and limitations.  Projects that do not include consolidation
        will receive zero consolidation points.

        Consolidation Points  = 0.5  x (Benefit/Cost Points)

4.       Ranking Within Each Category

        Within each category, projects will be ranked in order based on  the total points assigned
        the project using the following formula:

        Total Priority Points = (Adjusted Benefit/Cost Points) + (Consolidation Points)

        Projects receiving the most priority points will be given the highest ranking on the Priority
        List.  In cases of ties in the number of priority points, projects  with the lowest median
        household income will receive the highest ranking.

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       5.      Small Community Set-Aside

               Following completion of the ranking process,  the  Priority List  will be  reviewed to
               determine if at least 15 % of funding for projects above the funding line is for public water
               systems which regularly  serve fewer than 5,000 people, as required by the Safe Drinking
               Water Act. If this is not the case, the Priority List will be  adjusted by exchanging the
               lowest ranking projects above the funding line that serve 5,000 or more with the highest
               ranking projects  below the funding line that serve  fewer than 5,000,  until  the 15 %
               requirement is satisfied.

C.     Priority System Deadlines

       Should any project fail to comply with any of the following deadlines in this Priority System,
       the funds reserved for said project will be released and made available to any projects that
       are ready for loan award on a first-come, first-served basis.

       1.      By October 1. 1996.  submit two (2) copies  of the DWSIRLF facilities plan prepared in
               accordance with  the DWSIRLF loan  program regulations,  to  the  Department of
               Environmental Quality and  one  (1) copy to  all  intergovernmental review agencies  (see
               Appendix K of DWSIRLF Loan  Program Regulations): The Department of Environmental
               Quality must be copied on the transmittal letters to all intergovernmental review agencies.
               Intergovernmental review comments and public hearing comments may be excluded in this
               submittal.

               Prior to beginning the facilities plan, the potential applicant and/or its registered engineer
               must  request and  receive  facilities planning  guidance  from  the  Department  of
               Environmental Quality, and should attend a preplanning conference with the Department
               staff as early in the planning process as practical.

       2.      By October 1, 1996, the loan recipient must advertise for the DWSIRLF facilities
               plan a public hearing, and submit proof of such advertisement to the Department
               of Environmental Quality.

       3.      By December 1, 1996, the following documents must be submitted to the Department.

               •  all intergovernmental review  comments;
               •  a transcript of the public hearing comments;
               •  plan revisions pursuant to public hearing/IGR comments; and
               •  a summary of how each public hearing/IGR comment was addressed.

               It is not necessary to receive comments on the facilities plan from the Department of
               Environmental Quality prior to:

               •  advertising the public hearing;
               •  holding the public hearing; or
               •  submitting this information to the Department.

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        Any significant changes made to the facilities plan (i.e., changes in the chosen alternative,
        location of the facilities, etc.) after this deadline will be considered as a first submittal of
        the facilities plan. The loan recipient will then be considered to be in violation of this
        Priority System deadline.

4.      By January 1, 1997, the following documents, if required by the project, must be
        submitted to the appropriate Intergovernmental Review agency:

        •   completed archaeological /cultural surveys must be submitted to the Department of
           Archives and History for approval.

        •   completed vegetative/wildlife surveys must be submitted to the Natural Heritage
           Program for approval: and

        •   Section 404/Section 10 Permit applications must be submitted to the Army Corps of
           Engineers (and the Bureau of Marine Resources for Jackson, Harrison, and Hancock
           County projects).

These submittals must be made in accordance with the Intergovernmental Review Process, if
required for the project. The Department of Environmental Quality must be copied on the
transmittal letter to these agencies.

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                                      NORTH CAROLINA
Priority Ranking Criteria

Projects will be prioritized based on points accrued in the following five categories:

•   Public Health - Projects necessary for compliance with federal or State regulations may receive points from
    the item with the highest point value in this category.  Projects to correct acute or imminent health hazards
    (e.g., nitrate, nitrite, or fecal coliform MCL violations) may receive a maximum of 150 points.  A maximum
    of 100 points will be given to projects that correct immediate health hazards, a maximum of 60 points will
    be given to those correcting chronic health hazards, projects  correcting potential health hazards may receive
    a maximum of 40 points, and system improvement projects may receive a maximum of 20 points.

•   Consolidation - A maximum of 10 points may be given to projects to improve water system reliability
    through  interconnection with an existing system, purchasing  part or all of a system, or purchasing water
    capacity from another system. Projects to provide water service to an existing community whose water
    supply does not meet standards for PWSs may receive  10 points. Consolidation projects and projects where
    consolidation is not physically feasible may receive 5 points.

•   Reliability - A maximum of 5 points may be given to projects to increase system reliability. Projects to
    provide redundancy to critical treatment or delivery functions may be awarded 3 points and projects to
    provide emergency backup electrical power sources may receive  3 points (up to the maximum).

•   Affordability - Projects may receive up to 50 points based on a comparison of the projected monthly
    residential user cost at the completion of the project with the service area's MHI. Projects with rates greater
    than or equal to  1.01 percent will receive  50 points while projects with rates between 0.26 percent and 0.5
    percent will receive the minimum, 5 points.

•   Source Protection and Management - Projects for systems with existing activities or programs that
    efficiently protect the public health may receive up to 10 points.  Systems employing voluntary watershed or
    wellhead protection programs may receive 5 points each. For water loss reduction, cross-connection and
    demand  management programs systems may receive 3  points each (up to the 10 point maximum).
Notes
    Funding Ceiling - The maximum amount of funding to a single applicant in any one fiscal year is $3
    million. Loans solely for project planning purposes are capped at $25,000 per fiscal year.

    Project Planning - In  any fiscal year, a maximum of five percent of the annual allocation may be used for
    loans for project planning purposes.

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                                  NORTH CAROLINA
SECTION .0600 - PRIORITY CRITERIA

.0601 GENERAL CRITERIA

(a) In determining the priority to be assigned each eligible application the Division will consider
whether the project will:

       (1) Address the most serious risk to human health,

       (2) Facilitate compliance with the N.C. Drinking Water Act or the federal Safe Drinking Water
       Act, and

       (3) Assist systems most in need on a per household basis.

(b) The total priority points received will be the sum of all points awarded for each categorical
element.

History Note: Authority G.S. 159G-5; G.S. 159G-15;

Eff January 31, 1998.

.0602 PUBLIC HEALTH AND COMPLIANCE

Public health and compliance points may be awarded to a project based on the following criteria. A
proposed project shall be necessary to facilitate compliance with the N.C. Drinking Water Act or
the federal Safe Drinking Water Act and to alleviate the type of public health concern for which
points are awarded. A project will receive only points in the highest sub-category for which it may
qualify:

(1) Acute/Imminent Health Hazards.  A maximum of 150 points will be awarded to projects that
propose to eliminate any one or more of the following acute, ongoing health hazards to the consumer:

       (a) Projects that address documented nitrate, nitrite or fecal coliform MCL violations, or
       contaminant levels in drinking water which constitute acute health risks as defined in 40 C.F.R
       141.32(a)(l)(iii) which is  incorporated by reference at 15A NCAC 18C .1523; or

       (b) Projects that eliminate any contaminant in the public water system that poses an acute risk or
       imminent hazard to public health as determined by the State Health Director or a health risk
       assessment from the Division of Epidemiology, Department of Health and Human Services in
       accordance with G.S. 130A-2(3).

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(2) Immediate Health Hazards. A maximum of 100 points will be awarded to projects that propose
to eliminate any one or more of the following immediate health hazards to the consumer:

       (a) Projects that address surface water treatment technique violations occurring for two or more
       consecutive months;

       (b) Projects that resolve  any microbiological MCL problems for a water system with three or
       more microbiological MCL violations during the previous 12 months;

       (c) Projects that propose filtration for a surface water source or for a well that is determined to be
       under the direct influence of surface water by the Department that does not currently have
       filtration;

       (d) Projects that address the inability of a public water system to inactivate giardia and viruses in
       accordance with 15ANCAC 18C .2001; or

       (e) Projects that address documented recurrent water outages or low pressure below the
       requirements of 15A NCAC 18C .0901. Only problems that affect human consumption of
       drinking water will be considered for award of points under this criteria.

(3) Chronic Health Hazards.  A maximum of 60 points will be awarded to projects that propose to
eliminate any one or more of the following chronic health hazards to the consumer:

       (a) Projects that address exceedances  of the lead and copper action levels under 15A NCAC 18C
       .1507;

       (b) Projects that address violations of inorganic or organic chemical or contaminant MCLs under
       15ANCAC 18C.1510, .1517, and.1518;

       (c) Projects that address violations of radiological contamination MCLs under 15A NCAC  18C
       .1520 and.1521; or

       (d) Projects that address a chronic health hazard as determined by the State Health Director or a
       health risk  assessment from the Division of Epidemiology, Department of Health and Human
       Services.

(4) Potential Health Hazards.  A maximum of 40 points will be awarded to projects that propose to
eliminate any one or more of following potential health hazards to the consumer:

       (a) Projects that address low chlorine  residuals in the distribution system;

       (b) Projects that address periodic violations of an MCL;

       (c) Projects for line installation or extensions to areas with poor water quality or limited quantity;

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       (d) Projects to develop new sources of water, to augment existing sources, or to expand treatment
       capacity to meet current demand when the average daily demand for the previous 12 months
       equals or exceeds the available water supply as calculated in local water supply plans prepared in
       accordance with G.S. 143-355(1) or the maximum day demand for the previous 12 months equals
       or exceeds the approved water treatment plant design capacity; or

       (e) Projects to provide disinfection for a system that currently does not have disinfection.

(5) System Improvements. A maximum of 20 points will be awarded for projects that will provide
any one or more of the following general system improvements when needed for public health
purposes:

       (a) Projects that replace water supply production or treatment equipment that is undersized,
       malfunctioning or has exceeded its useful life;

       (b) Projects that replace undersized or leaking water lines;

       (c) Projects that address other water quality concerns such as iron, manganese, taste, and odor;

       (d) Projects to bring existing facilities to current design standards which affect water quality such
       as treatment, chemical storage and application, pumping facilities, finished storage,  distribution
       systems;

       (e) Projects that eliminate dead ends and provide looping in a distribution system.

       (f) Projects that increase water storage capacity;

       (g) Projects to develop new sources of water, to augment existing sources, or to expand treatment
       capacity to meet current demand when the average daily demand for the previous 12 months
       exceeds 80 percent of the available water supply as calculated in local water supply  plans
       prepared in accordance with G.S.  143-355(1)  or the maximum day demand for the previous 12
       months exceeds 80 percent of the  approved water treatment plant design  capacity; or

       (h) Projects for installation or upgrade of water treatment plant waste disposal facilities.

History Note: Authority G.S. 159G-5; G.S. 159G-15;

Eff January 31, 1998.

.0603 CONSOLIDATION

A maximum of 10 points will be awarded in this categorical element for projects  that propose to
improve water system reliability by interconnecting with an existing water system, by purchasing
systems in whole or in part, or by purchasing  water capacity from other systems,  as follows:

(1) Projects that propose consolidation to provide water service to an existing community whose
water supply cannot meet the rules governing public water systems at 15A NCAC 18C, 10 points;

(2) Projects that propose consolidation of existing water systems will be awarded 5 points;

(3) Projects where consolidation is not physically feasible,  5 points.

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History Note: Authority G.S. 159G-5; G.S. 159G-15;

Eff. January 31, 1998.

.0604 RELIABILITY

A maximum of 5 points will be awarded in this categorical element to projects that propose to
increase the reliability of the water system; points may be awarded for both Items (1) and (2) of this
Rule up to the maximum, as follows:

(1) Projects that provide redundancy to critical treatment or delivery functions, such as
interconnection, 3 points;

(2) Projects that provide emergency  backup electrical power source, 3 points if not awarded points
in Item (1) of this Rule.

History Note: Authority G.S. 159G-5; G.S. 159G-15;

Eff. January 31, 1998.

.0605 AFFORDABILITY

Points for affordability will be determined by comparing the projected monthly residential user cost
at the completion of the project with the median household income (MHI). User cost shall be
calculated from water rates based on a maximum of 4,500 gallons. The median household income
shall be determined in the service area of the water system. If median household income data is not
available for the service area, data from the nearest comparable community area shall be used.  The
Division may use county-wide median household income data if data for the  service area or nearest
comparable community area are not available. Points will be awarded on the following scale:

Rates = 0% to .25% MHI 0 points

Rates = 0.26% to .50% MHI 5 points

Rates = .51% to .75% MHI 20 points

Rates = .76% to 1.0% MHI 40 points

Rates = 1.01% or greater MHI 50 points

History Note: Authority G.S. 159G-5; G.S. 159G-15;

Eff. January 31, 1998.

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.0606 SOURCE PROTECTION AND MANAGEMENT

The maximum value to be given for source protection and management categorical elements is 10
points. Points shall only be awarded for existing activities or programs that efficiently protect the
public health, as follows:

(1) Participation in source water protection activities; points may be awarded in Sub-Items (a) and
(b) of this Item up to the maximum, as follows:

       (a) Voluntary water supply watershed protection activities, 5 points, or

       (b) Voluntary wellhead protection program, 5 points.

(2) Efficient water use, as shown by the applicant's establishment and administration of the described
programs; points may be awarded in Sub-Items (a), (b), and (c) of this Item up to the maximum, as
follows:

       (a) Water loss reduction program  which includes water audits, comprehensive metering, and
       hidden leak detection, 3 points;

       (b) Cross-connection control program, 3 points;

       (c) Demand management strategies, such as a water conservation incentive rate structure,
       incentives for new or replacement installation of low flow faucets, showerheads and toilets, or a
       water reclamation or reuse system, 3 points.

History Note: Authority G.S. 159G-5; G.S. 159G-15;

Eff January 31, 1998.

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                                      SOUTH CAROLINA
Priority Ranking Criteria

First, projects will be assigned to one of the eight priority classes (I-VIII).

•   Significant Non-Compliance (Acute) - Projects designed to address significant non-compliance problems
    with primary MCLs or treatment techniques that pose an acute risk to public health (e.g., microbial, nitrate,
    nitrite, SWTR) will receive the highest priority.

•   Non-Compliance (Acute) - Projects intended to correct non-compliance problems that are not determined
    to be significant, yet pose an acute risk to public health, including GWUDI, low pressure, and leaky lines.

•   Significant Non-Compliance (Chronic) - Projects designed to address significant non-compliance
    problems with primary MCLs or treatment techniques that pose a chronic risk to public health (e.g.,
    synthetic organic contaminants).

•   Non-Compliance (Chronic) - Projects intended to correct non-compliance problems that are not
    significant, but that pose a chronic risk to public health (e.g., lead & copper action levels).

•   Projects Supplying Safe Drinking Water to an Area Not Presently Served by a Public Water System
    Where a Hazard to Public Health has been Identified.

•   Projects to Correct Non-Compliance With Secondary Maximum Contaminant Levels.

•   Projects to Ensure Compliance With the State SDWA and the State Primary Drinking Water
    Regulations.

•   Projects to Extend or Provide Service to Existing Residences in an Area Experiencing Problems With
    Secondary Water Quality Contaminants or Quantity Issues That Could Result in Public Health
    Problems.

Once projects have been grouped into  the  eight classes listed above, they are prioritized within each class based
on the following three categories:

•   Regionalization/Consolidation - Preference is first given to projects that incorporate regionalization or
    consolidation.

•   Affordability - Preference is then given to systems with current annual user rate charges greater than 1.25
    percent of MHI.

•   Number of Taps Affected By the Project - Last,  preference is given to projects that serve the most taps.

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Notes

•   Funding Ceiling - No more than 25 percent of the project loan fund may be lent to any one project.

•   Disadvantaged Communities - Projects for disadvantaged communities may be given loans with more
    favorable conditions than the 20-year maximum, standard interest rate loans.  Projects may qualify for Level
    1 or Level 2 disadvantaged community status based on the MHI of the service population, the local county's
    unemployment rate, and the level of the current or proposed user charge. Level 1 communities are funded at
    the standard rate, but are given a 30-year maximum.  Level 2 communities are also given a 30-year
    maximum.  If the user charge rates still exceed the target level  with the standard interest rate, then the
    interest rate will be reduced incrementally, to a minimum of 0 percent as needed, to reach the target level, if
    possible. If a project is still considered unaffordable, assistance will be provided in locating other potential
    funding  sources that may be packaged with a loan.

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                                   SOUTH CAROLINA
III. Project Selection
The state must develop a comprehensive priority fist of projects and identify those projects expected to
receive funding in the first year after the grant is awarded (priority projects).  Only those projects on the
comprehensive list of projects may be considered for a loan under the DWRSF program.

A. Priority Ranking System

Section 1452(b)(3) of the SDWA requires that the IUP, to the maximum extent practicable, give priority
for use of the DWSRF 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 systems most in need on a per household basis, according to state affordability criteria.

The State of South Carolina will use the following ranking system in developing a comprehensive priority
list of projects eligible for assistance from the DWSRF. This ranking system is based on the above criteria
as well as a State initiative to encourage and facilitate the consolidation or regionalization of public water
systems. This state initiative, in concert with state regulatory programs, promotes compliance with the
SDWA.

Projects eligible for assistance will be divided into eight categories with projects in Category #1 receiving
the highest priority for funding and projects listed in Category #8 receiving the lowest priority for funding.

        Category # 1

        Projects which will correct significant non-compliance problems, as defined by the EPA, with
        primary maximum contaminant levels or treatment techniques which pose an acute risk to public
        health (i.e., microbial, nitrate, nitrite and surface water treatment rule).  For the purpose of this
        ranking system, a public water system which was determined to be in significant non-compliance
        as of April 1, 1997, will be considered for ranking within this category.

        Category # 2

        Projects which will correct non-compliance problems which are not considered to be "significant"
        as defined by the  EPA and any identified problems such as groundwater under the direct influence,
        leaking water lines and low pressure, which pose an acute risk to public health.

        Category # 3

        Projects which will correct significant non-compliance problems, as defined by the EPA, with
        primary maximum contaminant levels or treatment techniques which pose a chronic risk to public
        health (i.e., synthetic organic contaminants, inorganic contaminants other than nitrate and nitrite,
        radionuclides and the lead and copper rule). For the purpose of this ranking system, a public water
        system which was determined to be in significant non-compliance as of April  1, 1997, will be
        considered for ranking within this category.

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        Category # 4

        Projects which will correct non-compliance problems which are not considered to be "significant"
        as defined by the EPA and any identified problems such as systems exceeding the lead and/or
        copper action levels, which pose a chronic risk to public health.

        Category # 5

        Projects which will protect public health by supplying safe drinking water to an area not presently
        served by a public water system where a hazard to public health has been certified by the
        Department.  For example, the groundwater in an area which is utilized by a number of existing
        residences on private wells is contaminated with a synthetic organic contaminant.

        Category # 6

        Projects to correct a public water system's noncompliance with a secondary maximum contaminant
        level(s).

        Category # 7

        Projects necessary to ensure continued compliance with the State Safe Drinking Water Act and
        State Primary Drinking Water Regulations (i.e.,  replacing or rehabilitating infrastructure before it
        becomes a non-compliance problem).

        Category # 8

        Projects to extend or provide service into an area to serve existing residences which are
        experiencing problems with secondary water quality contaminants or quantity issues that could
        result in public health problems.

Projects within each category are prioritized based on the following criteria:

>  Regionalization/Consolidation
>  Affordability; and,
>  Number of taps affected by the project

Projects within each category are first grouped based on whether or not the project will result in the
consolidation or regionalization of water systems.  Consolidation of water systems is when two or more
separately managed water systems combine to form one system under one management structure.
Regionalization is when two or more separately managed water systems interconnect for the purpose of
utilizing a water source(s) in lieu of each system developing its own or  additional water source(s); however,
each system retains its own identity under separate management.  The group of projects resulting in the
consolidation or regionalization of water systems will be ranked higher than those that do not.

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The projects within each of these two groups are further subdivided based on the greatest need on a per
household basis. Those systems which have rates where the current annual user charge, based on 6,000
gallons per month, exceeds 1.25 percent of the median household income (MHI) will receive the highest
ranking within the group.  For purposes of this ranking system, this percentage will be referred to as the
level of effort (LOE).  Municipal projects have been ranked using the City's 1990 MHI and projects for
other entities have been ranked using the applicable county 1990 MU An eligible sponsor may obtain the
NEW for its actual service area from the Office of Research and Statistics,  State Budget and Control
Board. If the sole beneficiary of a project is a municipality, but the project  sponsor is another entity, the
MHI of the  municipality to be served may be used in lieu of the sponsor's MHI.  The final criteria for
ranking projects will be based on the number of current taps affected by the project with the highest
number of taps receiving the highest ranking.

The figure below illustrates conceptually how projects in each category will be ranked:
                          -VM-
                                                                  Proiect 1(1.200 taps)
                                                                  Project 2 (950 taps)
                                                                  Project 3 (922 taps)
                                                                  Project 4 (340 taps)
                                                                 Project 5 (1,710 taps)
                                                                 Project 6 (850 taps)
                                                                 Project 7 (222 taps)
                                                                 Project 8 (140 taps)
                                                                 Project 9 (710 taps)
                                                                 Project tO (650 taps)
                                                                 Project 11 (455 taps)
                                                                 Project 12 (2,500 tap*
                                                                 Project 13 (550 taps)
                                                                 Project 14 (540 taps)
                                                                 Project 15 (105 taps)
                                                                 Project 18 (100 taps)

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Disadvantaged Community Systems

Projects will normally be funded at the standard interest rate for a maximum term of 20 years; however,
loan applicants which are considered disadvantaged community systems will be offered loans at even more
favorable terms. Loan terms and conditions will be determined after DHEC has approved construction
plans and specifications and the BCB has completed review of the financial loan application.

Disadvantaged community systems, subdivided into two levels, are public water systems which meet
affordability criteria that are based on the median household income (NW of the water system's entire
service area, the local county's unemployment rate and the level of the current or proposed user charge.

A. Level 1 Disadvantaged Community System

To qualify as a Level 1 Disadvantaged Community System one of the following criteria must be met:

>  The applicant's service area is  less than eighty (80%) percent of the State MHI; or,
>  The applicant's service area is  more than eighty (80%) percent of the State MHI but less than 100% of
    the State MHI and:
    •   The applicant is  located in a county with an unemployment rate at least one percentage point higher
       than the latest annual State average; or,
    •   The current or proposed annual user charge, based on 6,000 gallons per month, exceeds 1.25% of
       the applicant's MHI.

If the applicant meets one of the above criteria, the term of the loan may be extended up to thirty (30) years
(not to exceed the project's useful life), and the project would be funded at the standard interest rate.

B. Level 2 Disadvantaged Community System

To qualify as a Level 2 Disadvantaged Community System both of the following two criteria must be met:

>  The applicant's MM is less than $26,256 (the State MHI); and,
>  A rate increase is required for the project which would result in a user charge higher than the target
    user charge. Target  user charge  is defined as the annual average residential user charge for water,
    based on 6,000 gallons per month, equal to at least 1.25% of the applicant's MHI.

If an applicant qualifies as a Level 2 Disadvantaged Community System the loan term must first be
extended to the  project's  maximum useful life, up to  30 years.  If, after such term extension, user charge
rates still exceed the target level with the  standard interest rate, then the interest rate will be reduced
incrementally, to a minimum of 0% as needed, to reach the target level, if possible.  If a project is still
considered unaffordable  after the maximum available interest rate subsidy, assistance will be provided in
locating other potential funding sources that may be packaged with a loan.

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Maximum Loan to an Individual Project

In order to assist as many projects as possible the maximum amount to be tent for any one project will be
25 % of the project loan fund (maximum loan = $3,853,616.00). In order to meet the allocation
commitment under the SDWA, DHEC may waive the maximum loan amount for any one project if there
are not enough projects ready to proceed.

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                                            TENNESSEE
Priority Ranking Criteria

Projects will be prioritized based on points accrued in one of the following seven categories. Priority points
will be assigned on a 100-point scale based on the severity of the problem. Projects addressing acute risks will
receive the greatest number of points.

•   Water Quality Problems - One hundred points will be assigned for disease outbreaks or acute health risks,
    80 points for chronic water quality problems, 60 points for potential water quality problems, 40 points for
    operational problems, and 20 points for any other problems.

•   Source or Plant Capacity - Eighty points will be assigned for water shortage or rationing, 60 points for 80
    percent capacity rule, 40 points for exceeding capacity on peak days, and 20 points for projected need within
    10 years.

•   Storage - Eighty points will be assigned for less than 50 percent daily demand, 60 points for 50 to 75
    percent daily demand, 40 points for 75 to 100 percent daily demand, and 20 points for 100 to 125 percent
    daily demand.

•   Leakage - Eighty points will be assigned for 50 percent or greater water loss, 60 points for 40 to 49 percent
    water loss, 40 points for 30 to 39 percent water loss, and 20 points for 20 to 29 percent water loss.

•   Pressure - Eighty points will be assigned for pressure consistently less than 20 psi, 60 points for pressure
    periodically less than 20 psi, 40 points for pressure occasionally less than 20 psi, and 20 points for marginal
    pressure (20 to 30 psi).

    Replacement or Rehabilitation Projects - Eighty points for essential equipment failure, 60 points for
    essential equipment deteriorated and near failure, 40 points for non-essential equipment failure, and 20
    nnintQ fnr nnn-RQQfntinl fniiinmfnt Hftfrinratfrl
l^OOl^llllCll l^l^ULlJ-/llll^lll. lll^ll^lltJlClll^ll ClllU lll^Cll -LC111UL1
points for non-essential equipment deteriorated
    Water Line Extensions - One hundred points for special acute health problems, 80 points for exceeding
    drinking water limits or without water, 60 points for nuisance or quantity problems, 40 points for all water
    line extensions, 40 points for water line relocations.
Notes
    Tie-Breaking Procedure - In the event of a tie, communities with greater economic need are given a higher
    priority ranking. Economic need is determined by an Ability to Pay Index developed by the University of
    Tennessee Center for Economic and Business Research.

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                                  STATE OF TENNESSEE
In accordance with Section 1452(b), states must develop a list of projects that will receive funding in the first
year after the grant award and a comprehensive priority list of eligible projects for funding in future years.
Priority for the use of funds must be to projects that:

•   Address the most serious risk to human health
•   Are necessary to ensure compliance with the requirements of SDWA
•   Assist systems most in need, on a per household basis, according to state affordability criteria

Water systems requesting loans for water projects through the drinking water State Revolving Fund (SRF)
will be assigned priority points based on instructions given in the Safe Drinking Water Act (SDWA). The
SDWA instructs states to utilize SRF funds to address risks to human health, compliance with the Act, and to
assist systems most in need on a per household basis.  Tennessee has established a priority ranking system,
which will comply with the instructions in the SDWA.  Priority points will be assigned on a 100 point scale
based on the severity of the problem. The only projects eligible for the maximum of 100 points will be those
that address serious, acute risks to human health.  Other projects will be assigned 20, 40, 60, or 80 points
depending on the severity of the problem and whether a compliance problem exists. Projects requesting
funds for ineligible activities such as fire protection, dam construction or future growth will not be assigned
priority points. Projects that receive the same priority points will be ranked according to the ability to pay
index for each community.  This will satisfy SDWA requirements to assist systems most in need on a per
household basis.  Seven categories of projects have been established which encompass all types of water
system projects. A project can receive points from only one category.

PRIORITY POINTS FOR DRINKING WATER SRF PROJECTS

1. Water Quality Problems
        100 Points - disease outbreak or acute health risk
       80 Points - chronic water quality problems
       60 Points - potential water quality problems
       40 Points - operational problems
       20 Points - other

2. Source or Plant Capacity
       80 Points - water shortage or rationing
       60 Points - 80% capacity rule
       40 Points - exceeding capacity on peak days
       20 Points - projected need within 10 years

3. Water Storage
       80 Points - less than 50% daily demand
       60 Points - 50 to 75% daily demand
       40 Points - 70 to 100% daily demand
       20 Points - 100 to  125% daily demand

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4.  Leakage Problems
        80 Points - 50% or greater water loss
        60 Points - 40 to 49% water loss
        40 Points - 30 to 39% water loss
        20 Points - 20 to 29% water loss

5.  Pressure Problems
        80 Points - pressure consistently less than 20 psi
        60 Points - pressure periodically less than 20 psi
        40 Points - pressure occasionally less than 20 psi
        20 Points - pressure marginal (20 to 30 psi)

6.  Replacement or Rehabilitation projects
        80 Points - essential equipment failure
        60 Points - essential equipment deteriorated & near failure
        40 Points - non-essential equipment failure
        20 Points - non-essential equipment deteriorated

7.  Water Line Extension
        100 Points -  special acute health problems
        80 Points - exceeding drinking water limits or without water
        60 Points - nuisance or quantity problems
        40 Points - all water line extensions
        40 Points - water line relocations

The affordability criteria is used to prioritize projects that have the same number of points based on project
need. Affordability criteria is based on the Ability to Pay Index (ATPI) established by the University of
Tennessee Center for Business and Economic Research. Communities with greater economic need are given
lower points and a higher ranking. The  allocation formula uses a broad definition of fiscal capacity that
includes per capita income, per capita property tax base, and per capita sales. The intent is to measure fiscal
capacity in terms of the available resources for paying for services.

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                                             ILLINOIS
Priority Ranking Criteria

Projects will be prioritized using the State Loan Priority Index, based on the following four factors:

•   Population - Projects will receive up to 5.3 points based on the service population of the system. The
    number of points is derived using the log base 10 of the number of people served by the  system.

•   Project Need - Points will be assigned based on the evaluated need for the project. For  example, projects
    that address an immediate threat to public health will receive 100 points, projects to address acute violations
    of the SDWA will receive 75 points, projects to address chronic violations of the SDWA will receive 50
    points, etc.  Projects may only receive points for one item.

•   Financial Hardship - Projects will receive points based on the financial hardship facing the system.
    Projects will receive up to 5 points depending on the percentage of people in the community who are living
    at or below the poverty level.  In addition, the project will receive up to  5 points based on percentage of
    people living above the State average unemployment rate, (maximum points go to higher percentages)

•   Small Public Water Systems - Five points will be assigned to projects  for public water systems serving
    fewer than 10,000 people.
Notes
    Affordability - Unlike most States, which use MHI to assess affordability, Illinois uses the unemployment
    rate.

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                                     ILLINOIS
     SUBPART B: PROCEDURE FOR CALCULATING THE LOAN PRIORITY INDEX

Section
663.210 Formula for Computing the Loan Priority Index
EMERGENCY
663.220 Al Factor ~ Population
EMERGENCY
663.230 A2 Factor - Project Need
EMERGENCY
663.240 A3 Factor ~ Financial Hardship
EMERGENCY
663.250 A4 Factor - Small Public Water Systems
EMERGENCY
663.260 A5 Factor ~ Readiness to Proceed
EMERGENCY
663.270 Scoring Conventions
EMERGENCY
      SUBPART B: PROCEDURE FOR CALCULATING THE LOAN PRIORITY INDEX

Section 663.210 Formula for Computing the Loan Priority Index
EMERGENCY

The Loan Priority Index (LPI) is a number that is the product of five factors. The LPI is calculated as
follows: (Al + A2 + A3 + A4) x A5 = LPI.

Section 663.220 Al Factor (Population)

EMERGENCY

Al is a factor, which evaluates the existing population that is served by the proposed project. Al is
calculated as log base 10 of the number of persons served by the project, with a maximum value of 5.30
points. The applicant shall provide the population served figure, which the Agency will verify from its
records.

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Section 663.230 A2 Factor (Project Need)

EMERGENCY

A2 is a factor that evaluates and quantifies eligible drinking water needs associated with a proposed
project. The need for the proposed projects will be quantified by using the single most appropriate of the
following methodologies:

a) For projects that meet the Health Hazard Determination criteria set out in Section
663.120, the A2 score will be 100 points.

b) For projects that will correct violations of the Safe Drinking Water Act determined
through compliance monitoring, points will be awarded based on the seriousness of
the violations that make the project necessary. The violations will be quantified from
the applicant's Monthly Operating Reports. The values for the violations are as
follows:

        1) Acute Violation      75 points;

        2) Chronic Violation    50 points

c) For projects that will prevent future acute or chronic violations and address a need
that has been demonstrated  by compliance monitoring, Section 663.260 allows for
assigning a portion of the acute and chronic violation points for priority scoring
purposes.

d) For projects that will correct violations of the State's protection of public health rules
regarding adequate pressure, transmission, and storage of drinking water, as
contained in 35 111. Adm. Code Part: 653, and evidenced by an Agency issued notice
of violation, Agency field inspection report or Agency approved project planning, the
A2 factor value will be 25 points.

e) For projects that will extend or provide community drinking water to an area
currently served by private wells will receive a score of 15 points, plus a need factor
which will be quantified from the percentage of private wells found to be out of
compliance with regulations or advisories administered by the Illinois Department
of Public Health and which pose a potential threat to public health based on sampling
or inspection as determined by the health authority responsible for the area to be
served.  The percentage of wells, expressed as a decimal, that are unsatisfactory will
be multiplied by 10  and the result added to the 15 points to complete the A2 score.

f) Renovation, repair, reconstruction or  replacement of facilities to maintain the safe
and adequate water  supply capabilities for which they were designed and to enable
their continued service  will  be assigned an A2 value of 10 points.

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Section 663.240 A3 Factor (Financial Hardship)

EMERGENCY

A3 is a factor, which adds points for applicants that have a higher rate of unemployment than the State
average, and includes points for the percentage of persons in poverty.  The A3 factor is calculated by
adding the unemployment percentage points to the persons in poverty points from the following tables:

Percentage Above State Average Unemployment Rate

Percentage                           Points
0.1 to  2.0                            1.25
2.1-4.0                              2.50
4.1-6.0                              3.75
6. land above                        5.00

          Percentage of Persons in Poverty

Percentage                           Points
5.0-10.0                             1.00
10.1-15.0                            2.00
15.1-20.0                            3.00
20.1-25.0                            4.00
25.1 -and above                     5.00

Section 663.250 A4 Factor (Small Public Water Systems)

EMERGENCY

A4 is a factor that provides a five point bonus to public water systems serving populations of less than
10,000.

Section 663.260 AS Factor (Readiness to Proceed)

EMERGENCY

A5 is a factor that measures the progress that an applicant has made on completing an application for loan
assistance. A5 will be calculated by adding the points awarded for completion of significant milestones to
the one point that will be awarded to all projects as follows: (A5a + A5b + A5c + A5d + A5e) +1 = A5.
The points awarded for each of the significant application items as follows:

        a)      Submission of project planning                        0.20 points;
        b)      Agency approved project planning                     0.20 points;
        c)      Submission of plans and specifications                 0.10 points;
        d)      Agency approved plans and specifications              0.30 points;
        e)      Agency approved dedicated source of revenue           0.20 points.

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663.270 Scoring Conventions

EMERGENCY

a) For purposes of assigning the A2 factor, projects that are being proposed to meet regulations that have
been published in the Federal Register but have a future effective date will be considered the same as
projects to correct violations of regulations that are already in effect.

b) Projects that are being proposed to prevent future acute or chronic violations predicted by compliance
monitoring are eligible for A2 factor points as follows:

        1) The applicant's compliance monitoring records must show concentrations of the contaminant to
       be controlled of at least 75% of the acute or chronic violation limit (existing contaminant
       concentration + acute/chronic limit x 100 = % violation limit);

       2) The A2 points for the project will be calculated by multiplying the percentage violation limit by
       the appropriate acute or chronic A2 points in Section 663.230(b).

For integrally related projects which  require construction by more than  one local government unit, each
project will proceed at the Loan Priority Index of the component project with the most favorable priority
ranking.

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                                              INDIANA
Priority Ranking Criteria

Projects will be prioritized based on points accrued in the following four categories:

•   Public Health - Projects for systems with MCL violations from the 3 preceding years may receive points
    for all standards violated in this category (up to 230 points).  For example, 30 points for acute violations
    (e.g., microbiological), 20 points for chronic violations (e.g., VOCs, radionuclides, etc.).

•   Assure SDWA Compliance - Projects to ensure SDWA compliance may receive points for all items that
    apply in this category (up to 50 points).  For example, 5 points for significant noncompliance, 25 points for
    an agreed order.

•   Affordability - Projects may receive up to 60 points on the basis of MHI (5 to 30 points) and water rate
    charges (5 to 30 points). Projects will receive more points for lower MHIs and higher water rate charges.

•   Additional Considerations - Projects to address infrastructure replacement and improvement, to fund small
    systems, to consolidate and regionalize,  and to address  inadequate water supply, may receive from 5 to  15
    points for all items that apply (up to 90 total points).
Notes
    Tie-Breaking Procedure - In the event of a tie, the project with more points in the Public Health Protection
    category will prevail. If the tie persists, the system serving the smaller population will prevail.

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                                      State of Indiana
                            DWSRF Priority Scoring and Ranking System
VI. Tie Breaking
If two or more projects score equally under the Project Scoring and Ranking System, the project with the
highest points in the Public Health Section will prevail. If a tie persists, then the project that serves the
smallest population will prevail.

VII. Scoring and Ranking System Criteria

The purpose of the scoring and ranking system is the prioritization of all eligible DWSRF projects that are
seeking funding for that year. Projects that seek to further the health protection objectives of the Safe
Drinking Water Act (section 1452 (a)(2)) and projects that rectify chronic and long term health risks will also
be given high priority consideration under this scoring and ranking system. Finally, projects that have
documented a financial need based on a per-capita household basis will be given enhanced point
consideration under this proposed scoring and ranking system. Scoring is based on the sum of all possible
points awarded within each category.  Systems which score the highest point total will be given the highest
priority on the project list.

VIII. Scoring and Ranking System

The criteria used to prioritize the eligible projects are described and weighted below.  Points apply to the
system applying for assistance. Scoring is based on the sum of all possible points  awarded within each
category.  Systems which score the highest point total will be given the highest priority on the project priority
list (PPL).

In determining the scoring and ranking system for eligible DWSRF projects the Indiana Department of
Environmental Management (IDEM) proposes that the highest priority be given to projects which seek to do
the following: alleviate public health risks, help assure compliance with the SDWA, and assist systems most
in need according to state affordability criteria.

Systems which score the highest point total will be given the highest priority on the project list. Consistent
with these aforementioned priorities, the numerical scores in the DWSRF priority ranking and scoring system
will be based on the following criteria:

       I        Public Health Protection: The project addresses the most serious risk to human health.
               (Total Maximum Points / 230)

       II      Assure SDWA Compliance: The project will ensure compliance with the requirements of
               the Safe Drinking Water Act, SDWA. (Total Maximum Points/50)

       III     Affordability: This criterion is based on the State's Affordability Criteria, service area
               population, and the service areas median home income. It is designed to assist systems most
               in need, on a per household basis.
               (Total Maximum Points / 60)

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       IV     Additional Considerations: This criterion offers additional points to projects for their
              efforts to improve drinking water quality.
              (Total Maximum Points / 90)

       The total numerical score for a project or a project segment will be the sum of the scores for criteria I,
       II, III, and IV.
Drinking Water State Revolving Fund Scoring and Ranking Point System

I.      PUBLIC HEALTH PROTECTION:
       The project addresses the most serious risk to human health.
       Public Health / SDWA MCL violation:
       Public and Environmental Health - Violations of National Drinking Water Standards
       Maximum Contaminant Levels (MCLs) are established by the SDWA for those contaminants which
       may be detrimental to public health. Violations of these levels in the 3 years preceding the
       development of a priority list carry the following weightings:
                                                                                    Points
              Microbiological, acute                                           30
              Nitrate / Nitrite, acute                                                   30
              Treatment Techniques / SWTR / Turbidity, acute                          30

              Volatile Organic Compounds (VOCs) / TTHMs                            20
              Synthetic Organic Compounds (SOCs)                             20
              Inorganic Chemicals (lOCs)                                             20
              Radionuclides                                                         20
              Lead/Copper                                                          20
              Consolidated Private Wells: 25% exceeds Maximum Contaminant Levels     20
              Other Treatment Techniques                                            20
                                                                             230 Maximum

II.     ASSURE SDWA COMPLIANCE: The project will ensure compliance with the requirements
       of the Safe Drinking Water Act, SDWA.
       SDWA Compliance:
              Significant Non-Compliance                                             5
              Warning of Non-Compliance (WONC)                                    5
              Notice of Violation (NO V)                                               15
              Agreed Order (AO)                                                     25
                                                                             50 Maximum

III.    AFFORDABILITY:
       A.     Median Household Income (MHI)
              MHI at or above $31,242                                               5
              MHI $24,994-$31,242                                                   15
              MHI below $24,994                                                     30

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       B.      Water Rate Charge Per 4,000 gallons
               Over $30.00 per 4,000 gallons                                              30
               Rate between $25.00-$30.00 per 4,000 gallons                               15
               Rate Below $25.00 per 4,000 gallons                                        5
               ** State agency approval of user charges or rate structure                 60 Maximum

IV     ADDITIONAL CONSIDERATIONS:
       This criterion allows for additional points in the scoring and ranking of projects.

       A.      Infrastructure Replacement / Improvement
               Water system infrastructure replacement projects will correct deficiencies or ensure
               compliance with the SDWA are based on at least a 20 year useful life. Loan assistance to
               upgrade, replace, or install the following:

               Source-Intake Structure                                                   5
               Controls / Instrumentation                                                5
               Disinfection and Filtration System                                          5
               Emergency Power Source                                                  5
               Pumping Station                                                          5
               Back Flow Prevention                                                     5
               Transmission and Distribution System                                      5
               Storage Facility                                                          5

       B.      Small System Funding
               The Safe Drinking Water Act requires that a State must, to the extent practicable,
               use a minimum of 15 percent of all dollars credited to the Fund to provide loan assistance to
               small systems that serve fewer than 10,000 persons.

               Systems with 10,000 persons or <                                           10

       C.      Consolidation / Regionalization
               This criterion is included to support the concept that larger systems are more apt to
               have managerial, financial and technical capabilities to ensure continued compliance with
               current and future requirements of both federal and state Safe Drinking Water laws and
               regulations.

               Physical Consolidation                                                    5
               including the consolidation of private wells into an existing system, where at a
               minimum 25% of the wells exceed Drinking Water Maximum Contaminant Levels.
               *Dependent upon the requisite EPA authorization.

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D.     Inadequate Water Supply
       Water supply operation projects which remedy the following conditions will be awarded
       points as follows as defined by the 10 State Recommended Standards for Water Works:

       a)      Water Pressure                                                    10
       The normal working pressure should be approximately SOpsi and not less than 35psi.
       The system shall be designed to maintain a minimum operating pressure of 20psi throughout
       the distribution system under all conditions of flow including peak periods.

       b)      Water Supply                                                      10
       The system is incapable of meeting the recommended daily peak water use demands.

       c)      Water Storage                                                     15
       The structure shall provide stability and durability as well as protect the quality of
       stored water. The minimum storage capacity (or equivalent capacity) for systems not
       providing fire protection shall be equal to the average daily consumption.

                                                                          90 Maximum

                                                                          Total
                                                                          Maximum
                                                                          Points = 430

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                                            MICHIGAN
Priority Ranking Criteria

Projects will be prioritized based on points accrued in the following six categories. Projects may receive up to
1000 total points.

•   Drinking Water Quality - Up to 450 points will be awarded to projects that will eliminate acute violations
    of drinking water standards (250 points for each violation), projects that will eliminate non-acute drinking
    water violations (200 points for each violation), projects that will upgrade a facility to maintain compliance
    with drinking water standards or capacity requirements (150 points), and projects that will eliminate
    exceedances of secondary MCLs (25 points).

•   Infrastructure Improvement - Up to 350 points  will be awarded to projects that will upgrade source or
    treatment equipment (125 points), projects that will upgrade transmission or distribution equipment (125
    points), and projects that will upgrade water storage facilities or pumping stations (125 points).

•   Population - Up to 50 points will be awarded to projects based on the system's service population. Large
    systems will receive more points than small systems; transient noncommunity  systems are eligible for only
    half of the total points available in this category.

•   Disadvantaged Communities - Up to 50 points will be awarded to community water supplies that serve
    disadvantaged communities.

•   Consolidation - Up to 100 points will be awarded to consolidation projects. Projects that will bring 1 or
    more PWSs into compliance  as a result of consolidation will receive 100 points. Projects that will correct
    deficiencies for 1 or more PWSs as a result of consolidation will receive 60 points and other consolidation
    projects will receive 40 points.

•   Wellhead Protection - Projects that serve communities with completed wellhead or source water protection
    plans will receive  100 points.
Notes
    Tie Breaking Procedure - In the event of a tie, systems with fewer than 2 violations of monitoring, record-
    keeping, and reporting requirements in the previous 2-year period will rank above systems with more
    violations.  If systems are still tied, the cost per population served for each project will be calculated; the
    system with the lowest ratio of cost to population will rank higher.

    Segmentation - Projects may be segmented if the cost of the proposed project exceeds 30 percent of the
    total amount available during the fiscal year or if the department has approved the system's application for
    segmentation.  Segmented projects will be assigned points as outlined above; after funding for the first
    segment of a project is accepted, subsequent segments will retain first priority during the following 3 fiscal
    years.

    Prior Year Eligibility - Projects on the priority list that are not funded during the year that the priority list
    is in effect will be automatically prioritized on the next annual list using the same criteria.

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                                         MICHIGAN

Sec. 5406.
 (1) The department shall annually develop a priority list of project eligible for assistance under this part.
Projects that are not funded during the year that a priority list developed under this section is in effect shall
be automatically prioritized on the next annual list using the same criteria, unless the water supplier
submits and amendment to its project plans submitted by water suppliers under section 5405 and the
criteria listed in subdivisions(a) through (f). Each project shall be assigned points up to a maximum of
1,000.  The point values are maximum values available for each category or subcategory listed in this
section and shall only be awarded if the project, substantially addresses the problem for which the point
award was given. If a project is primarily designed to replace individual wells at private homes, 50% or
more of the homes in the affected area shall meet equivalent water quality or infrastructure deficiency
criteria listed in subdivisions (a) through (f) in order to receive the maximum available points. If less than
50% of the homes in the affected area can demonstrate deficiencies, 1/2 of the total points shall be
awarded. Points shall be awarded as follows:

        (a) A maximum of 450 points may be awarded to a project that addresses drinking water quality as
        outlined in Act 399, if the project:

               (i) Is designed to eliminate an acute violation of a drinking water standard as defined in
               part 4 of the administrative rules for Act 399. A violation of a surface water treatment
               technique, or of a waterborne disease outbreak has been documented, 250 points shall be
               awarded for each violation.

               (ii) Is  designed to eliminate a violation of a drinking water standard other than those
               outlined in subparagraph (i), 200 points shall be awarded for each violation.

               (iii) Is designed to upgrade a facility to maintain compliance with drinking water standards
               or system capacity requirements, 150 points shall be awarded.

               (iv) Is designed to eliminate an exceedance of a secondary maximum containment level for
               aesthetic water quality, 25 points shall be awarded.

        (b) A maximum of 350 points shall be awarded to a project that addresses infrastructure
        improvements, as follows:

               (i) If source of treatment facilities are upgraded, including the water mains to connect to
               the distribution system, a maximum of 125 points shall be awarded, if the improvement is:
                       (A) To meet minimum capacity requirements, 100 points shall be awarded.

                       (B) For reliability, 75  points shall be awarded.

                       (C) For other source or treatment facility upgrades not included in subparagraph
                       (i)(A) or (B), 25 points shall be awarded.

                       (D) To satisfy the conditions of a formal enforcement action, 25 points shall be
                       awarded.

                       (E) For source water protection, 50 points will be awarded.

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       (ii) If transmission or distribution water mains are upgraded, a maximum of 125 points
       shall be awarded, if the improvement is:
               (A) To meet minimum capacity where flow or residual pressure is less than
               acceptable, 100 points shall be awarded.

               (B) For reliability, including looping or redundant feeds, 75 points shall be
               awarded.

               (C) Other transmission or distribution system upgrades not included in
               subparagraph (ii)(A) or (B),25 points shall be awarded.

               (D) To satisfy the conditions of a formal enforcement action, 25 points  shall be
               awarded.

       (iii) If water storage facilities or pumping stations are upgraded, a maximum of 125 points
       shall be awarded, if the improvement is:
               (A) To meet minimum capacity where storage or pumping capacity is less than
               requirements, 100 points  shall be awarded.

               (B) For reliability, 75 points shall be awarded.

               (C) Other storage facility or pumping station upgrades not included in
               subparagraph (iii)(A) or (B), 25 points shall be awarded.

               (D) To satisfy the conditions of a formal enforcement action, 25 points  will be
               awarded.

(c) A maximum of 50 points shall be awarded based on the population served by the water system
according to the following table. However, a transient noncommunity water supply as defined in
section 2 of Act 399 is eligible for 1/2 the point value listed in the following table.

Population                                                 Points
>50,000                                                    50
10,001-50,000                                             40
3,301 - 10,000                                              30
501-3,300                                                 20
0-500                                                     10

(d) A maximum of 50 points shall be awarded to a community water supply that is a disadvantaged
community.

(e) A maximum of 100 points shall be awarded for projects that include consolidation as follows:

       (i) If one or more public water supplies are brought into compliance with state drinking
       water standards as a result of consolidation, 100 points shall be awarded.

       (ii) If deficiencies,  which are documented in writing by department, at 1 or more public
       water supplies are corrected as a result of consolidation, 60 points shall be awarded.

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               (iii) Other consolidations, not included under subparagraph (i) or (ii), shall be awarded 40
               points.

        (f) For communities that have completed a wellhead protection plan or a source water protection
        plan, 100 points shall be awarded.

        (g) After scoring, using the criteria in subdivisions (a) through (f), if 2 or more projects have the
        same score, the following tie-breaker shall be applied:

               (i) If the system has fewer than 2 violations of the monitoring, record-keeping, and
               reporting requirements of Act 399 in the previous 2-year reporting period, or no violations
               if ownership of the system has changed in the previous 2 years, it will rank above systems
               having more violations.

               (ii) After applying the tie-breaker in subparagraph (i), if 2 or more projects score exactly
               the same, a calculation of the cost per population served by the water system shall be
               made. The  affected projects shall be ranked with the lowest ratio of cost to population
               ranked higher.

(2) The priority list shall be submitted annually to the chairpersons of the senate and house of
representatives standing committees that primarily consider legislation pertaining to the protection of public
health and the environment.

(3) In preparing the priority list, to ensure that a disproportionate share of available funds for a given fiscal
year is not committed to a single water supply project, the department may segment a project if either of the
following criteria is present:

        (a) The cost of the proposed project is more that 30% of the total amount available in the fund
        during the fiscal year.

        (b) The department has approved a water supplier's application for segmenting a project.

(4) Segments of a project that have been segmented under subsection (3) shall be assigned priority points
based on the project as identified in the project plan. After funding assistance for the first segment is
accepted, the remaining segments will retain first priority for funding assistance on the next 3 fiscal  year
priority lists. All projects with previously funded segments will be designated with first priority. Ranking
order of these projects to receive funding assistance will be subject to the relative ranking of all first
segment projects.

(5) In preparing the intended use plan, the department shall make every effort to assure that funding
assistance is equitably distributed among public  water supplies of varying sizes.

(6) For purposes of providing assistance, the priority list shall take effect on the first day of each fiscal
year.

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                                           MINNESOTA
Priority Ranking Criteria

Projects will be prioritized based on points accrued in the following five categories:

•   Public Health Priority Points - Under the public health category, only existing eligible public drinking
    water supply projects may receive priority points for acute violations, noncompliance with treatment
    technique requirements, and violations of nonacute MCLs. All projects must address the public health
    issues described. Up to 100 points will be assigned to systems with acute violations. Projects may receive
    points for all items that apply (e.g., 25 points for 1 or more acute violations in the past 36 months, 25 points
    for  1 or more violations of the MCL for total coliform in the past 36 months, etc.).  Up to 15 points will be
    awarded to systems that fail to comply with treatment technique requirements. Fifteen points will be
    awarded to systems that violate non-acute primary MCLs.  Up to 25 points will be assigned to projects for
    contaminated private wells that will result in the creation of an eligible PWS or connection to a PWS.

•   Inadequate Water Supply Priority Points - Up to  15 points will be assigned to systems that cannot
    consistently provide adequate water. Systems that serve more than 1,000 people must have evidence of an
    emergency and water conservation plan to receive points in this category.

•   Public Drinking Water Infrastructure  Improvement Priority Points - Systems that have received points
    under either category above cannot receive  points in this category. Systems can only receive points for one
    of the following improvements: system reliability (7 points), looping of water mains (7 points), chlorine
    feed equipment (7 points), 1-day storage  (6 points), or other infrastructure upgrades (5 points).

•   Additional Priority Point Categories - Ten points will be assigned to systems that have suffered as a result
    of a natural disaster and have no other source of State or federal disaster relief.  Ten points will be assigned
    to projects that result in compliance with an enforceable document of the Minnesota Department of Health.
    Ten points will be assigned to projects that  result in the consolidation of existing drinking water systems.
    Three points will be assigned to projects that protect drinking water sources.

•   Financial Need - Only community systems are eligible for points based on financial need. A system with
    an MHI less than either the MHI for a metropolitan or nonmetropolitan area, as applicable, will be assigned
    5 points.
Notes
    Tie-Breaking Procedure - If two or more projects have the same priority points total, the project for the
    system whose service population has the lowest MHI will receive the highest priority.

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                    MINNESOTA DEPARTMENT OF HEALTH
                     DRINKING WATER REVOLVING FUND


4720.9015 PROJECT PRIORITY LIST.

Subp, 1. General. The commissioner must develop and maintain a project priority list for entities that have
a need for a new or upgraded water supply system.

Subp. 2. Notice.  At least once a year, the commissioner must provide notification to all eligible public
drinking water suppliers that requests for placement on the project priority list are being accepted. The notice
must include the schedule for submittal of the requirements listed in subparts 4 and 5, or subpart 6, in order
to be placed on the project priority list.

Subp. 3. Project priority list amendments. As needed, but at least once per year, the commissioner must
amend the project priority list to add or delete projects.

Subp. 4. General requirements. To be eligible for placement on the project priority list, a written request
for placement on the project priority list must be submitted to the commissioner.  The request must include:

A. the type of project (planning, design, or construction) for which financial assistance is being requested;

B. a current cost estimate and, if different, the amount of financial assistance being requested; and

C. a proposed project schedule in a form acceptable to the commissioner.

Subp. 5. Additional requirements for applicants seeking financial assistance for planning activities
and design. The  request for inclusion of a project under the planning or design section of the project priority
list must include:

A. a description of the need for the project;

B. an estimate of the population and number of  households to be served; and

C. a map showing the geographical area the project is expected to serve.

Subp. 6. Additional requirements for applicants seeking financial assistance for construction.  The
request for listing a construction project on the project priority list under this part must include:

A. a map of the geographical area;

B. the population and number of households to be served;

C. a description of the current drinking water supply system;

D. a discussion of any existing and potential problems or failures in the current drinking water system;

E. an analysis of possible alternatives for the correction of the problems or failures, including a cost estimate
for each alternative;

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F. the selection of an alternative, including the reasons for the selection of this alternative and a detailed
cost estimate; and

G.  for public water suppliers serving more than 1,000 persons, the status of the applicant's implementation
of an  approved emergency and water conservation plan required under Minnesota Statutes, section
103G.291.

Subp. 7. Priority points. A project must be assigned project priority points before being listed on the
project priority list. The commissioner must review and approve the information submitted under subpart 4,
5, or 6 before assigning project priority points. Approval must be based on the determination that the
information addresses the requirements under subpart 4, 5, or 6 and an evaluation that the selected alternative
will provide a solution to the problems presented.  A project's priority points must be the total number of
priority points assigned under parts 4720.9020 to 4720.9040.  The project priority points may be recalculated
when new information becomes available until the project is placed on the intended use plan as provided in
part 380.0255.

Subp. 8. Listing order. Projects must be listed on the project priority list in descending order according to
the number of total priority points assigned to each one.  When two or more projects have the same priority
point total, the project sponsored by the entity with the lowest median household income must receive the
highest priority.

4720.9020 PUBLIC HEALTH PRIORITY POINTS.

Subpart 1. Existing eligible public drinking water supply. Only existing eligible public drinking water
supply projects can be assigned priority points under subparts 2 to 4.

Subp. 2. Acute violations.  A maximum of 100 priority points may be assigned to a project as described in
items A to E.

A.  25 priority points must be assigned if there has been one or more violations defined as an acute violation
in Code of Federal Regulations, title 40, section 141.32(a)(l)(iii)(A), within  the past 36 calendar months.

B.  25 priority points must be assigned if there has been one or more violations defined as an acute violation
in Code of Federal Regulations, title 40, section 141.32(a)(l)(iii)(B), within the past 36 calendar months.

C.  25 priority points must be assigned if there has been one or more occurrences defined as a waterborne
outbreak in Code of Federal Regulations, title 40, section 141.2, within the past 36 calendar months.

D.  25 priority points must be assigned if there have been one or more violations of the maximum
contaminant level for total coliforms pursuant to Code of Federal Regulations, title 40, section
141.32(a)(l)(iii)(C), when total coliforms are determined to be present in the well(s) of a groundwater system
or at the point of entry for a surface water system within the past 36 calendar months.

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E. 15 priority points must be assigned if there have been one or more violations of the maximum
contaminant level for total coliforms pursuant to Code of Federal Regulations, title 40, section
141.32(a)(l)(iii)(C), when total coliforms are determined to be present in a part of the system other than the
well(s) of a groundwater system or at the point of entry for a surface water system within the past 36 calendar
months. Points may not be assigned under this item if points have been assigned under item D.

Subp.3. Failure to comply with treatment technique requirements.

A. 15 priority points must be assigned if there have been one or more failures to comply with a treatment
technique requirement pursuant to Code of Federal Regulations, title 40, section 141.70 to 141.74.

B. 13 priority points must be assigned if there have been one or more failures to comply with a treatment
technique requirement, other than those referred to in item A, within the past 36 calendar months. Additional
points must not be assigned for multiple failures to comply with the same requirement.

Subp 4. Violations of nonacute primary maximum contaminant levels. Fifteen priority points must be
assigned if there has been a violation of any nonacute primary maximum contaminant levels within the past
36 calendar months.

Subp. 5. Contaminated private wells. Only projects that will result in the creation of an eligible public
water supply or connection to an eligible public water supply may be assigned points under this subpart.
More than 50 percent of the private wells in the proposed project service area must meet a criterion in item A
or B for priority points to be assigned under item A or B. If 50 percent or less of the private wells in the
proposed project service area meet the criterion, one-half of the listed points must  be assigned. Results of
tests, done in accordance with the U.S. Environmental Protection Agency approved analytical methods, must
be submitted.

A. Twenty five priority points must be assigned if test results indicate that a condition exists that meets the
criteria in subpart 2, item A, B, C, or D.

B. Ten priority points must be assigned if a drinking water advisory has been issued by the Minnesota
Department of Health.

4720.9025 INADEQUATE WATER SUPPLY PRIORITY POINTS.

Subpart 1.  Consistently provide.  For the purposes of this part, the term, "consistently provide" will mean
that, at all times, the minimum pressures and flow rates for plumbing fixtures as defined in the Minnesota
Plumbing Code part 4715.1770, are maintained.

Subp. 2. Existing public drinking water supplies. For existing public drinking water supplies serving
more than 1000 people, evidence of the implementation of an emergency and water conservation plan
approved by the Minnesota Department of Natural Resources pursuant to Minnesota Statutes, section
103G.291, subdivision 3, must be provided to the
commissioner before priority points will be assigned under this item.

A. Fifteen priority points must be assigned if an existing public drinking water supply is unable to
consistently provide adequate water for the domestic water supply, excluding industrial and commercial uses.

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B. Seven priority points will be assigned if an existing public drinking water supply is able to consistently
provide adequate water for the uses listed under item A, but is unable to consistently provide water for other
uses, including industrial and commercial.

Subp. 3.  Inadequate supply from private wells. Only projects that result in the creation of an eligible
public water supply or connection to an eligible public water supply may be assigned points under this
subpart.

A. Fifteen priority points must be assigned if more than 50 percent of the private wells in the proposed
project service area are unable to consistently provide an adequate amount of water for general household
purposes as demonstrated by an analysis of the aquifer supply and the demand for water in the  area.

B. Five points must be assigned if 50 percent or less of the private wells in the proposed project service area
meet the criteria in item A.

4720.9030 PUBLIC DRINKING WATER INFRASTRUCTURE IMPROVEMENT PRIORITY
POINTS.

Subpart 1. Existing public drinking water supplies. Only existing eligible public drinking water supply
projects may be assigned priority points under this part. A project may be assigned priority points under only
one subpart. If it has been assigned points under parts 4720.9020 or 4720.9025, it may not be assigned
points under this part.

Subp. 2.  System Reliability.  Seven priority points must be assigned to projects that will address a
demonstrated need for a new backup well or interconnection with another public water supply.

Subp. 3.  Looping of water mains. Seven priority points must be assigned to projects that will address a
demonstrated need for looping of watermains.

Subp. 4.  Chlorine feed equipment. Seven priority points must be assigned to projects that will address a
demonstrated need for chlorine feed equipment.

Subp. 5.  One day storage. Six priority points must be assigned to projects that allow the supply to have
one day storage capacity equal to the average daily use.

Subp. 6.  Other infrastructure projects.  Five priority points must be assigned to projects that will address
a demonstrated need for new or upgraded public drinking water facilities if priority points have not been
assigned under subpart 2, 3, 4, or 5.

4720.9035 ADDITIONAL PRIORITY POINTS CATEGORIES.

Subpart 1. Natural disaster. In order to be assigned priority points under this subpart, a description of the
existing public drinking water supply, or portion thereof, damaged or destroyed by a natural disaster must be
submitted along with a statement that other state or federal disaster relief is not available.

A. Fifteen extra priority points must be assigned if more than 50 percent of the proposed project will replace
or repair the existing public drinking water supply damaged or destroyed by a natural disaster.

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B. Ten extra priority points must be assigned if 50 percent or less of the proposed project will replace or
repair the existing public drinking water supply damaged or destroyed by a natural disaster.

Subp. 2. Compliance. Ten extra priority points must be assigned if the proposed project will enable an
eligible public drinking water supply to comply with an administrative penalty order, bilateral compliance
agreement, permit, or other enforceable document issued by the Minnesota Department of Health.

Subp. 3. Consolidation. Ten extra priority points must be assigned if the proposed project will result in the
consolidation of existing public drinking water supplies.

Subp. 4 Source water protection. Three extra priority points must be assigned if the proposed project, or
any portion thereof, is needed in order to protect the drinking water source.

4720.9040 FINANCIAL NEED.

Subpart 1. General.  Only projects sponsored by community public drinking water supplies can be assigned
priority points under this part.

Subp. 2. Median Household Income. The metropolitan and nonmetropolitan median household income
levels of the state must be determined from income data from the most recent census of the United States or
from data from the state demographer.

A. A municipal community public water supply must use the median household income for the appropriate
political subdivision or subdivisions encompassing its service area, except as provided in item C.

B. A nonmunicipal community drinking water supply must use the median household income for the smallest
political subdivision encompassing the nonmunicipal community drinking water supplies, except as provided
in item C.

C. If there is reason to believe that the United States  census data or the data from the state demographer is
not a currently accurate representation of the median household income, documentation of the reasons why
the data is not an accurate representation may be submitted. If the commissioner, after review, agrees, the
applicant may submit additional information regarding median household income.  The information must
consist of reliable data from local, regional, state or federal sources, or from a survey conducted by a reliable
impartial source. The median household income level must be updated to reflect the most current and
accurate figures.

Subp. 3. ASSIGNMENT OF POINTS, A project sponsored by a community public drinking water supply
with a median household income less than either the median household income for a metropolitan or
nonmetropolitan area, as applicable, must be assigned five priority points.

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j	OHIO	I

 Priority Ranking Criteria

Projects will be prioritized based on points accrued in the following six categories:

 •   Public Health Issues - Points may be given to projects to correct acute contamination occurring in the past
    12 months, chronic contaminants, and secondary standard violations.  For acute violations, 0 to 100 points
    per item (MCL violations, Nitrate, SWTR) will be given depending on the frequency or level of
    contamination.  For chronic violations (lOCs, VOCs, Radionuclides, THMs) 0 to 20 points per contaminant
    will be given based on contaminant level. Points will also be given for other chronic health issues (e.g., lead
    and copper, boil status, contaminated private wells).  One point per standard will be given for secondary
    standard iron and manganese violations.

 •   Compliance with Federal and State Safe Drinking Water Act - Projects to achieve or maintain federal
    and State SDWA compliance by eliminating design deficiencies or inadequate storage and distribution
    infrastructure will receive points.  Projects may receive 5 to 20 points each for various deficiencies
    associated with water quantity, water source, and water treatment plants. They may also receive 5 to 20
    points each for various storage and distribution deficiencies.

 •   Effective Management - Points may be  given to projects that implement beneficial management practices
    such as backflow prevention programs, preventative maintenance programs, and water conservation
    programs (1 point per program).

 •   Consolidation and Regionalization - Points may be given to projects that have the potential for, or propose
    to involve, consolidation of water systems (25 points for potential and 25 additional points for each system
    that commits to interconnection).

 •   Affordability - Points will be given to projects based on affordability. If the water and sewer rates for the
    system are more than the Combined Water and Sewer Benchmarks1 or if the eligible water system has no
    rate structure, the project will receive 20 points.

    Population Distribution - Projects will receive up to 24 points based on population, with the maximum
    number of points going to the smallest systems. For example, systems that serve fewer than 500 people will
    receive 24 points.  Those that serve more than 30,000 people will receive only 3 points.
           Benchmarks were developed using data obtained from the Ohio EPA=s 7997 Sewer and Water
   Rate Survey and the  1990 U.S. Census Report of MHI for Ohio.

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                                             OHIO
                       PROJECT PRIORITY RANKING AND SELECTION

The purpose of the priority ranking system is to establish a list of eligible projects to be funded in a manner
that the most serious risks to public health are given the highest priority.

All eligible projects will be rated with respect to six categories to determine their ranking and selection for
funding under the DWSRF.  These categories are:

1.      Public health issues
2.      Continued compliance with federal and state SDWA requirements
3.      Bonus points for effective management
4.      Consolidation/regionalization
5.      Affordability
6.      Population

Any projects ranking will be the sum of all points received in each category. However, before any final
funding is granted, each project will be carefully evaluated to ensure that the project addresses all issues for
which points are scored. Each category is briefly described below.

1. Public Health Issues

The greatest emphasis will be placed on addressing public health issues related to the acute contaminants
microbial and nitrate. The period of analysis will be the 12 months prior to inclusion on the priority list.
Maximum Contaminant Level (MCL) violations caused by failure to monitor or report will not be included in
the analysis. The following are the points assigned to the various levels of contamination.

Acute contaminants per 12 months

Bacteriological /contamination (Actual confirmed, not monitoring and/or reporting violations)
         No MCL violations                                   0 points
          1-2 MCL violations                                  50 points
          3 or more violations                                100 points

Nitrate
          Level consistently less than 5.0 mg/1                    0 points
          Level >5.0 mg/1 < 10 mg/1                            5 0 points
          Level > 10 mg/1                                     100 points

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Surface Water Treatment Rule

         No violations treatment technique violation points       0 points
         1-2 treatment technique violations                    50 points
         3 or more treatment technique violations              100 points

Chronic contaminants will be addressed as shown below with greater weight being given to exceedances of
the Unreasonable risk to Health (URTH) value as published by the United States Environmental Protection
Agency (USEPA) in the latest table of Drinking Water Regulations and Health Advisories.

Chronic Contaminant Groups: Inorganic Chemicals (IQCs). Volatile Organic Chemicals fVOCs).
Radionuclides. Trihalomethanes (THMs)

         No MCL violations                                 0 points*
         Above MCL < URTH                              10 points*
         Greater than URTH                                20 points*

*multiply by the number of violations in each contaminant group

Lead and Copper

         In compliance                                       0 points
         Exceedance of copper action level                      5 points
         Exceedance of lead action level                       10 points

Boil Status (on boil advisory)

         No boil advisories                                   0 points
         Boil advisory 1-10 weeks                             7 points
         Boil advisory > 10 weeks                            15 points

Disinfectant Residual in the Distribution System (for 12 month period)

         0-5 violations                                       0 points
         5-25 violations                                     10 points
         25 or more                                         20 points

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Contaminated Private Wells*

          If 51% or more of the wells in the
          project area are contaminated                         60 points

          If less that 50% but more than
          25%                                               30 points

          If less than 25% but more than
          0%                                                20 points

*Based on best estimate after consultation with local health department

Note: Only fundable project is service from a public water system, preferably extension of existing system.

While not directly related to public health, Ohio does enforce the secondary standards for iron and
manganese. Therefore, the following point allocation has been included in the priority ranking system.

Secondary Standards

          Any exceedance of iron and/or manganese standard                 1 point*

          *per standard

2. Compliance with Federal and State Safe Drinking Water Act

The next category is continued compliance with federal and state Safe Drinking Water Act requirements. The
condition of the physical infrastructure has been selected as an indicator or predictor of the systems ability to
remain in compliance. The rational being that without adequate supplies of source water, with inadequate,
undersized or deteriorated plants, and with inadequate finished water storage and/or distribution systems, a
public water system will be unable to maintain compliance with Safe Drinking Water Act requirements.
Included in this portion of the evaluation are bonus points to reward systems that are taking steps to stay in
compliance with state requirements  and to reduce water usage. The following are the points assigned to the
various elements in this category.

Design Deficiencies

Quantity
Adequate                                                               0 points
Shortage during peak demand                                              5 points
Shortage during peak season                                             10 points
Continual shortage                                                      15 points

Source
Ground Water Under the Direct influence
of Surface Water (GWUDI)(final)                                       20 points
Improper well construction                                               10 points
Inadequate intake structure                                              20 points

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Plant
Inadequate processes                                                    5 points*
Insufficient plant capacity                                               20 points
Deteriorated plant                                                       20 points

*points for each inadequate process. Processes to be considered are: chemical feed, rapid mix, clarification
(flocculation/settling), filtration, disinfection control, aeration/stripping, ion-exchange, corrosion control, and
pumping.  Maximum-45 points.

Inadequate processes and insufficient plant capacity projects will require a sufficiency evaluation to
determine if operations are optimized prior to ranking.

Storage and Distribution System

Storage
Greater than or equal to 1 day                                                      0 points
Adequate hydropneumatic tank but
less than one day's storage                                                         5 points
Inadequate hydropneumatic tank
and/or less than 1 day's storage                                                   10 points

Distribution
Low pressure                                                                    10 points
Deterioration                                                                    20 points
Inadequate size                                                                  20 points

3. Bonus points for effective management

Backflow prevention program                                                    1 point
Contingency plan                                                               1 point
Bacteriological sample siting plan                                                1 point
WHP program in progress                                                       1 point
Preventative maintenance program                                               1 point
Water conservation program (unaccounted water loss of 15% or less)                1 point
Metered system                                                                1 point

4. Consolidation/Regionalization

The third category considered is Consolidation/Regionalization.  This category is included to support the
concept that larger systems are more apt to have managerial, financial and technical capabilities to ensure
continued compliance with current and future requirements of both federal and state Safe Drinking Water
laws and regulation.  The following elements are considered. Points are given to the applicant for the loan
only, and not to systems for which the points are earned.

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Projects which provide the potential for consolidation (there are
existing public water systems which could connect to the project
without political conditions and adequate capacity to serve them)                             25 points
If the project involves the consolidation/regionalization of
more than one community water system or an eligible
noncommunity water system and there is a signed commitment
letter to tie in or an ordinance mandating tie-in                                              25 points/
                                                                                       additional
                                                                                       system

If the project involves the consolidation/regionalization of
more than one noncommunity water system (for-profit
Privately owned PWS) and there is a signed commitment
letter to tie in or an ordinance mandating tie in                                              25 points/
                                                                                       additional
                                                                                       system

5. Affordabilitv Criteria

The next category is affordability.  One of the best indicators of affordability is the environmental/health
utility burden placed on a household (i.e. the cost of water/sewer service).  A higher degree of financial
burden will be placed on water systems with relatively lower populations because the user base will be
smaller over which the cost of the utility service is recovered.  Per household analysis is relevant in that
household costs of infrastructure improvements are a function of the population size of the community or
service area.

Not all public water systems have sewer systems associated with them and some public water systems have
no rate structure on which to base comparisons. Therefore it was necessary to develop a means to evaluate
affordability in these circumstances, and to set some  default limits for public water systems with no economic
data. The options are presented below.

If entity is an eligible water system that does not have a rate
structure (e.g. Mobile Home Parks, Schools) (By default)                               20 points

If Combined Water and Sewer Benchmarks (1990) are  or = Annual Water and Sewer Rates (1995)                                        0 points

For systems with only an existing water system

If the Water Benchmark (1990) is < Annual Water Rate(1995)                          20 points
If the Water Benchmark (1990) is > or = Annual Sewer Rate (1995)                       0 points

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For systems with only an existing sewer system

If the Sewer Benchmark (1990) is < Annual Sewer Rate (1995)                         20 points
If the Sewer Benchmark (1990) is > or = Annual Sewer Rate (1995)                      0 points

Sewer and Water Benchmark Values

The affordability analysis is performed through an economic screening which measures the financial impact
of the rate structure on a residential user or household.  This is accomplished through a comparison of the
current annual cost per residential user to a sewer AND/or water benchmark value.  Benchmarks were
developed using data obtained from the Ohio EPA's 1991 Sewer and Water Rate Survey and the 1990 U.S.
Census Report of median household income (MHI) for Ohio.

In developing the sewer and water benchmark values, sewer and water rates as a percentage of income were
analyzed for: 1) all communities that responded to the 1991  Sewer and Water Rate  Survey, and 2) only those
communities that responded to the Survey and had either a sewer and/or water rate increase. The benchmarks
are based on Ohio  communities that had a
sewer rate and/or water rate increase, because these rates should best reflect current conditions and costs of
wastewater treatment plants and/or water supply systems. It is assumed that communities raised their rates to
meet these prevailing costs and conditions.

The income value  of $25,155 represents the median of the 1989 Median Household Income for Ohio cities
and villages that responded to the 1991 Sewer and Water Rate Survey.

Sewer Benchmark

Of the Ohio communities which experienced a sewer rate increase during 1990 through 1991, The following
values were established by an analysis of the 75th and 90th percentiles for this group:

          Income                                                        Benchmark
          1989 MHI < $25,155                                           1.5% of MHI
          1989 MHI >$25,155                                            1.9% of MHI

Water Benchmark

Of the Ohio communities which experienced a water rate increase during 1990 through 1991, the following
values were established by an analysis of the 75th and 90th percentiles for this group:

          Income                                                      Benchmark
          1989 MHI < $25,155                                           1.1% of MHI
          1989 MHI >$25,155                                            1.5% of MHI

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6. Population Distribution Points

The final category is population served by the water system. As it is a goal of the program to give particular
emphasis and assistance to smaller systems, more points are awarded to communities which have relatively
smaller populations. The lower the population, the smaller the user base, and the less likely it is for such a
community to realize economies of scale in the financing of a drinking water system. Recognizing that the
smaller the system the more likely it would be to need assistance in financing, the following point weighting
was developed.

          Population or Service Area                             Points

          0<500                                                  24 points
          500<750                                                22 points
          75 0< 1000                                               20 points
          1000<2000                                              18 points
          2000<3000                                              16 points
          3000<5000                                              14 points
          5 000< 10,000                                            12 points
          10,000<30,000                                           8 points
          30,000
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                                            WISCONSIN
Priority Ranking Criteria

Projects will be prioritized based on points accrued in the following four categories:

•   Risk to Human Health - Points are given for only one item from (a) or one from (b)
    (a) Acute Contaminants: Projects that eliminate an MCL violation for total/fecal coliform will receive 500
    points (300 points if it eliminates an anticipated MCL violation).  Projects that eliminate an MCL violation
    for water treatment deficiencies will receive 400 points (200 points if it proposes to eliminate anticipated
    violations). Projects that eliminate a nitrate/nitrite MCL exceedance will receive 300 points (100 points for
    an anticipated violation).
    (b) Chronic Contaminants: The chronic contaminants are grouped as inorganics, VOCs, synthetic organics,
    radionuclides, or THMs. Different point values will be given depending on the type of contaminant and
    whether it exceeded or is anticipated to exceed the MCL.

•   Affordability - A project will be  granted additional points if it is associated with a system considered most
    in need of financial assistance on a per household basis. The total number of points will be based on
    population served, with an emphasis  on the smallest systems, and MHI. The system must serve a population
    of fewer than 10,000 persons and have an MHI less than or equal to 80 percent of the State MHI to acquire
    any points in this section.

•   Secondary Contaminants & System Compliance - Projects that seek to eliminate compliance issues may
    receive points in 21 categories that address State regulations. Points per item range from 4 to 10 and include
    10 points to reduce State MCLs, 10 points to address documented storage deficiency, 4 points if the project
    includes replacement of asbestos-cement pipe material, 4 points for projects including long-term zebra
    mussel control, etc. No points will be given for a project that has already received points under the first
    category.

•   System Capacity - Projects may  receive points for all criteria related to the technical, financial, and
    managerial capacity of the public water system. For example, if the applicant has written an emergency
    action plan or implemented a private well abandonment ordinance, then 5 additional points per item will be
    given.
Notes
    Tie-Breaking Procedure - If two or more projects have the same priority score, the project serving the
    larger population shall have the higher priority.

    Funding Ceiling - There is a biennial funding limit of 25 percent for applicants.

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                                         WISCONSIN
                      SUBCHAPTERII - Priority Scoring and Ranking System

NR 166.25 Priority scoring criteria. The purpose of the priority scoring criteria is to establish a list of
eligible projects to be funded in a manner that is in accordance with the federal requirements of the 1996 Safe
Drinking Water Act reauthorization. Consistent with the act, the following criteria shall apply:

Note:  The act requires, to the maximum extent practicable, that priority ranking be given to projects that
1) address the most serious risk to human health; 2) are necessary to ensure compliance with the
requirements of the Safe Drinking Water Act (including requirements for filtration); and 3) assist systems
most in need on a per household basis according to state affordability criteria.  The department will give
first priority to acute public health risk, particularly those related to microbiological organisms and
second priority given to situations that pose chronic and longer term health risks to consumers, such as
organic chemical contamination.  The scoring criteria also considers issues that are related to
infrastructure upgrading or replacement to address those projects (or portions of a project) which are
eligible for funding but not included in the first two sections.

(1) Risk to human health.
A project shall be assigned points based on criteria in a single category in par. (a) or a single category in par.
(b) but not from both.  If the severity of the problem is not reflected in any of the following categories, the
department will determine the number of points the project shall be assigned.

        (a) Project addresses a maximum contaminant level (MCL), action level (AL) or treatment technique
        violation, or an acute or chronic health hazard.

                1. Acute contaminants: The acute contaminants are divided into three groups.  Points are
               awarded in the following manner for a project that eliminates a problem that poses an acute
               health hazard from one of these  groups:

                       a. Total/fecal coliform - five hundred (500) points shall be awarded to a project that
                       proposes to  eliminate an MCL violation that has occurred or will address a
                       confirmed waterborne disease outbreak as defined in s. NR 809.04(65).

                       b. Water treatment deficiencies - four hundred (400) points shall be awarded to a
                       project that eliminates violations of filtration requirements (turbidity) given in s. NR
                       809.76 and disinfection requirements in s. NR 809.77 or confirmed microbial
                       (including Giardia and Cryptosporidium) contamination found in finished water.

                       c. Nitrate/nitrite - three  hundred (300) points shall be awarded to a project that
                       eliminates a continuing nitrate/nitrite MCL exceedance.

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        2. Chronic contaminants:  The chronic contaminants are divided into five subgroups;
        inorganics, volatile organic chemicals (VOC), synthetic organic chemicals (SOC),
        radionuclides, and total trihalomethane compounds (THM).  Points shall be awarded in the
        following manner for a project that eliminates a chronic health hazard from these groups of
        chemicals:

               a.  For each subgroup, other than the THM subgroup, only the MCL exceedance of
               greatest percentage magnitude is to be used for the point calculation, even though
               multiple contaminant MCL exceedances might be occurring. For exceedances in
               multiple subgroups, see letter c below. The MCL exceedance shall be divided by
               the current MCL or AL and then multiplied by 50 to obtain a subgroup point total.

               b.  For the THM subgroup, the total sum THM exceedance as defined in NR 809.23
               is  used for the calculation similar to letter a. above.

               c.  For MCL exceedances in more than one  subgroup, the highest point  level of the
               subgroups shall be used as the primary number to be divided by the current MCL or
               AL and then multiplied by 50.  The other subgroup exceedances will be divided by
               their respective MCL or AL and then multiplied by  10. The total point value shall
               be the sum of points in each subgroup.

(b) Project prevents an anticipated MCL, AL, or treatment technique violation or critical health
hazard.  Points shall be awarded to a single group under either 1. or 2 to a project that proposes to
eliminate an anticipated acute or chronic health hazard.

        1. Acute contaminants: The acute contaminants are divided  into three groups.  Points shall
        be awarded from one of the following groups for a project that eliminates an anticipated
        acute health hazard.

               a.  Total/fecal coliform - three hundred (300) points shall be awarded to a project
               that eliminates an anticipated MCL violation, where no actual violation has yet
               occurred.

               b.  Water treatment deficiencies - Two hundred (200) points shall be awarded to a
               project that proposes to eliminate anticipated violations of filtration requirements
               (turbidity) given in s. NR 809.76, interim enhanced  surface water treatment rule
               requirements, or microbial (including Giardia and Cryptosporidium) detections in
               the raw water.

               c.  Nitrate/nitrite - one hundred (100) points shall be awarded to a project that
               proposes to eliminate an anticipated nitrate/nitrite violation.

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               2. Chronic contaminants: The chronic contaminants are divided into five subgroups;
               inorganics, volatile organic chemicals (VOCs), synthetic organic chemicals (SOCs),
               radionuclides, and total trihalomethane compounds (THMs).  Points shall be awarded in the
               following manner for a project that eliminates an anticipated chronic health hazard from
               these groups of chemicals:

                       a. Twenty (20) points shall be awarded to a project that proposes to eliminate an
                       anticipated exceedance of an inorganic, volatile organic chemical, synthetic organic
                       chemical, radionuclide or total trihalomethane chemical contaminant.  An additional
                       five (5) points shall be awarded for each additional subgroup addressed by a project
                       that eliminates an anticipated exceedence.

(2) Financial need.
Projects will be granted additional points if the project is associated with a system considered most in need of
financial assistance on a per household basis.  The number of points will be  determined by evaluating table A
and table B for the public water system in question  and totaling the points allocated in the point columns.  A
public water system must have a population less than  10,000 and a median household income less than or
equal to 80% of the states median household income to acquire any points in this section.
TABLE A
POPULATION
0-99
100-999
1000-1999
2000-2999
3000-4999
5000-9999

POINTS
30
25
20
15
10
5
                                        TABLE B
                                        Median Household Income
                                        75%-80%
                                        70%-74%
                                        65%-69%
                                        60%-64%
                                        <60%
POINTS
5
10
15
20
25
(3) Projects that address a secondary contaminant violation or system compliance with ch. NR 811, except
that no points will be awarded for specific areas already receiving points under sub. (1).  A project shall be
assigned points from the following categories:

        (a) Ten (10) points shall be awarded if the project will reduce a secondary drinking water
        contaminant, as listed in s. NR 809.60(2), to a level below the aesthetic standard.

        (b) Ten (10) points shall be awarded if the project addresses areas of inadequate distribution system
        pressure, as defined in s. NR 811.63(1).

        (c) Ten (10)  points shall be awarded if the project will address a documented storage deficiency
        (excludes fire demand) within an existing public water supply system.

        (d) Ten (10) points shall be awarded if the project addresses a source or capacity deficiency where
        there is a demonstrated need within the  existing public water supply system.

        (e) Four (4) points shall be awarded if the project includes replacement of lead service lines.

        (f) Four (4) points shall be awarded if the project includes long term zebra mussel control.

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(g) Four (4) points shall be awarded if the project includes installation of an auxiliary power source
to a well, pump station, or water treatment plant.

(h) Four (4) points shall be awarded if the project includes replacement of asbestos-cement pipe
material.

(i) Four (4) points shall be awarded if the project includes upgrading of existing or SCADA system.

(j) Four (4) points shall be awarded if the project includes installation or replacement of fluoridation
equipment.

(k) Four (4) points shall be awarded if the project includes the upgrading of existing facilities for
capturing, holding, or disposing of waste (liquid or solid) generated from the water system operation.

(1) Four (4) points shall be awarded if the project includes the replacement of undersized mains (less
than six inches in diameter).

(m) Four (4) points shall be awarded if the project includes the looping of water mains and/or the
elimination of dead end watermains.

(n) Four (4) points shall be awarded if the project includes treatment that reduces the potential for
formation of disinfection by-products including trihalomethanes.

(o)Four (4) points shall be awarded if the project as a secondary benefit will increase the fire
protection of the community.

Note:  If the primary purpose of the project is to improve the fire protection of the system, the
project is not eligible for funding.

(p) Four (4) points shall be awarded if the project will include the installation of a water booster
station or pressure reducing station to improve the quality of service to the customers by supplying
water at a more acceptable level.

(q) Four (4) points shall be awarded if the project includes the installation of an additional river,
railroad, or highway  crossing to a  major system divide that results in better system reliability.

(r) Four (4) points shall be awarded if the project includes the replacement of one or more pumps or
pump motors that are no longer functional, or have reached the end of their useful life.

(s) Four (4) points shall be awarded  if the project improves the intake structure for a surface water
plant.

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        (t) Four (4) points shall be awarded if the public water system currently has a documented water loss
        in excess of 30% and the project reduces the water loss within the system.

        (u) Four (4) points shall be awarded if the project includes removal of watermains that pass through
        sanitary sewer manholes.

(4) System capacity points. Points shall be awarded to a project based on the technical, financial and
managerial capacity of the public water system in the following manner:

        (a) Five (5) points shall be awarded if the applicant has a written emergency action plan for the
        public water system.

        (b) Five (5) points shall be awarded if the applicant has and is implementing a private well
        abandonment ordinance for the public water system.

        (c) Five (5) points shall be awarded if the applicant has a wellhead protection plan and ordinance for
        all the wells in the public water system.

        (d) Five (5) points shall be awarded if the applicant has a certified operator and provisions for a
        certified back-up operator.

        (e) Five (5) points shall be awarded if the applicant has a cross connection control program for the
        public water system.

        (f) Five (5) points shall be awarded if the applicant has a dedicated replacement fund for the water
        system.

(5) Project priority score. The total points from subsections (1) through (4) shall be added together to
determine the final project priority score.

NR 166.26  Procedure for determining and updating project priority scores.

(1) An applicant intending to apply for safe drinking water loan program financial assistance under ch. NR
166 shall submit to the department an intent to apply form and a project priority ranking form.

(2) No project shall be assigned a priority score or be placed on the project priority list until a completed
priority ranking form has been submitted by the applicant and evaluated by the department.

(3) Upon completion of the review and determination of the priority score, the department shall notify the
applicant in writing of the determination.

(4) The department may review and, if necessary under the requirements of this chapter, recalculate priority
scores to assure accuracy and timeliness of the information provided.  The department shall notify the
applicant in writing of any change in the priority score.

(5) If the applicant objects to the department's determination of the priority score in sub. (3) or (4), the
applicant shall notify the department in writing within 30 days. The notice shall state the  specifics of the
objection. The  applicant shall submit any information which supports the objection and the priority score
which the applicant believes should be assigned to the project based on this information.

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(6) Upon receipt of a notice under sub. (5), the department shall reevaluate its determination of the project
priority score and shall notify the applicant. If the department denies the requested priority value, it shall
state the reasons in writing.

(7) Notwithstanding sub. (4), an applicant may request a reevaluation of its project priority score or any
factor thereof at any time.  The department shall notify the applicant of the results of the reevaluation in the
same manner as required in sub. (5).

NR 166.27 Project ranking system.

(1) The department shall maintain a project priority list which shall be based on the intent to apply forms
submitted and shall rank the projects for which priority scores have been determined.  The projects shall be
ranked in the order of descending priority score, with the project with the highest priority score ranked first.
A funding list shall be developed consisting of all projects for which applications have been submitted as per
s. NR 166.05(2).

(2) In case 2 or  more projects have the same priority score, the project serving the larger population shall
have the higher priority.

(1) Projects will normally be funded in the order they appear on the funding list. Projects on the funding list
may be by-passed, upon written notice by the department, if any of the following situations occur:

        (a) The Safe Drinking Water Act Amendments of 1996 require that 15% of the funds available for
        loans shall go to small systems with a population of less than  10,000. In the event that ranking the
        projects in descending order do not result in 15% of the funds going to small systems with a
        population less than 10,000, systems under 10,000 will be given priority until the 15% requirement
        is met.

        (b) Requirements of NR 166.10 are not met.

        (c) A project is withdrawn by an applicant.

        (d) The department determines that the applicant is unable to proceed with construction of the project
        in the fiscal year in which funds are requested.

        (e) The project failed to meet the engineering review requirements or does not have department
        approval of the project.

        (f) The applicant has reached the 25% biennial funding cap.

        (g) The DOA is unable to certify the applicant's ability to  repay the loan.

        (h) Refinancing restrictions.

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