UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                                                                       WSG 123
                                                    Date Signed: October 23,1998

                                    OCT  23
MEMORANDUM

SUBJECT;    Drinking Water Territorial Set-Aside Program and         of Funds

FROM:       RobertJ, Blanco, Director
             Implementation and Assistance Division (4808)
             Office of Ground Water & Drinking Water

TO:          Alexis Strauss, Acting Director
             Water Division
             Region IX

       Cynthia Dougherty has asked me to respond to your September 17 memorandum
regarding the Territorial Set-Aside program under the Drinking Water     Revolving Loan
Fund,  First, 1 want to apologize for the delays in getting you both guidance and funding for the
Program, Our belief was, and is, that the Territorial and Tribal Set-Aside Programs     going
to be quite similar in allowances, limitations,     program administration. Our plan had
to work out the major issues via the Tribal Program and once  we were certain of the
appropriate direction for that program, we intended to use it as the foundation for the Territorial
program guidelines.

       The substantive issues surrounding the Tribal Set-Aside Program have      resolved,
and  Cynthia recently signed the Tribal Set-Aside Program Guidelines, As soon as they
become effective - which will occur once they are either published, or a notice of their
availability is published, in the Federal Register ~ we will be    to         with the Territorial
program,  I have decided, however, that development of formal guidelines for the Territorial
Program, as originally planned,  is not mandatory. I        it  will be sufficient to direct you,
and  Region II, to use the Tribal Guidelines as a framework for developing your own Territorial
programs. Consequently, as soon as the Tribal guidelines are officially released,  I will be
sending a memorandum to both you    Region if which will  outline this new approach.  While
] can't be certain when the Tribal        will become effective, I         that it will occur in
the first or second week of November,  ! should  be able to provide you with the follow-up
memorandum within a      following       of the Tribal Guidelines.  Finally, i will
all available Territorial funds to you as soon as we receive the authority from the Comptroller to
do so. Our budget office predicts that this will also occur in the first or second week of
November,  i will        with the Territorial reprogramming as      as I have      given
approval to do so by the Comptroller, even if the Tribal package is not released.

       Again, I apologize for the delays in getting this program "off the ground", but arn
confident that you should be able to proceed with your program in the very near future. If you
have any further questions,       give me  a call on (202)260-5525, or      your     call

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