UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WSG 124
Date Signed: November 17, 1998
1 7 1998
MEMORANDUM
SUBJECT: Drinking Water Infrastructure Grants - Territorial Set-Aside Program
FROM: Robert J. Blanco, Director
Implementation and Assistance Division (4606)
Office of Ground Water & Drinking Water
TO: Alexis Director
Water Division
Region IX
Kathy C, Callahan, Director
Division of Environmental Planning & Protection
Region II
The purpose of this memorandum is to provide you with direction on your development
implementation of the Territorial Set-Aside Program which provided for under Section
1452(j) of the Drinking Water Act (SDWA). The Office of Ground and Drinking
Water (QGWDW) has recently published Final Guidelines on a similar program under the
SDWA - the Drinking Water Infrastructure Grants Tribal Set-Aside Program, 1 is a
copy of those Tribal guidelines. Since the Territorial and Tribal Set-Aside Programs are quite
similar in allowances, limitations, and program administration, our strategy has been to work
out the major issues via the Tribal Program and once certain of the appropriate direction for
that program, we would use it as the foundation for the Territoria! program guidelines,
The Tribal Guidelines were recently signed, copies have been forwarded to Congress
under the Congressional Reform Act requirements, a notice of their availability in
the Register on October 29, 1998, and we can now with the Territorial
program, I have decided, however, that development of formal guidelines for the Territorial
Program, as originally planned, is not mandatory. There are a few known differences
the two programs which I can address via this memorandum, but in general, I believe it is
sufficient to direct you to use the Tribal Guidelines as a framework for developing your
Regional Territorial programs.
As for the differences that I mentioned above, i believe are four that are worthy of
note. The first is simply that the SDWA that provides for the Territorial program is
different than that of the Tribal language. 2 is an excerpt from the SDWA that
s the Territorial references. "
-------
WSGF
Date Signed: November 17,1998
The second involves the amount of funds available to the Territorial program.
Section (j) of the SDWA provides that a maximum of 0.33 percent of the "aggregate amount
made available to carry out this section" be made available for grants for the four Territories.
The "amount available" is the annual appropriation for section 1452 activities the Tribal
Set-Aside and any funds that EPA sets for: a) Health Effects Studies, b) Small Systems
Technical Assistance, c) Monitoring for Unregulated Contaminants, and d) Operator
Certification Reimbursement. In addition, the SDWA not provide for any other funds
(such as external realtotments) to be to the Territorial Program - 0,33 percent of the
"aggregate amount available" is the maximum allowed.
The third involves the method of distributing the available funds among the four eligible
Territories, With the help of your staff, we have developed a formula that OGWDW will use to
allot the Territorial funds each year. That formula is explained in detail in Attachment 3, along
with the actual allotments for FY1997, FY1998 and FY1999,
The fourth is that under the Territorial program, Regions may grants
directly to water in the Territories, give a "program" grant to the Territorial government,
or do a combination of the two. If the EPA office chooses to grants to
public water systems, the Region will be for identifying projects, for
prioritizing those projects, for selecting the ones to receive funding, and for and
administration of the grants. Under this method, EPA Regions will be required to develop the
list of projects in consultation with the Territorial government, and will be required to give all of
the systems in the Territory an opportunity to comment on the projects selected and the
method of selecting those projects. The expectations are essentially the as they are with
your Tribal program.
If the EPA Regional office chooses to award a "program" grant to the Territorial
government, the Territory will be responsible for developing methods of identifying and ranking
potential projects, for selecting the ones to receive funding. The Territorial government
would then make subawards to eligible recipients for the individual projects. Under this
approach, the Territorial government's project ranking method must be on the three
criteria identified in the SDWA: 1) projects to address the most serious risk to human health; 2)
projects necessary to ensure compliance with the requirement of the SDWA; and 3) projects to
systems most in on a per household basis, in addition, the Territorial government
must establish a method of informing the water and the about their
program, the methods of project identification, ranking and selection. Your offices will, of
course, have the authority to establish guidelines for, and approve, such Territorial programs,
In cases where you award a "program" grant to a Territorial government, you may allow
the Territory to use up to 4 percent of the total "program" grant for its administration of the
Territorial program. We believe this is appropriate because it will be necessary for the Territory
to perform many of the functions that a is required to perform under the State Revolving
Loan Fund program - identification and selection of projects, informing the general public of
their program and decisions, award of subgrants, and oversight of the subgrant projects. As
the SDWA allows to use up to 4 percent of their capitalization grants for program
administration, we it is reasonable to provide the for a Territory which
is administering a Set-Aside Program.
-------
WSGF
Date Signed: November 17,1998
In general, the other provisions, allowances, limitations, and procedures that are
contained in the Tribal Set-Aside guidelines apply to the Territorial Program. This includes:
regulatory authority,
OMB Cost principles,
cross-cutting federal authorities,
schedule for allotment of funds,
duration of availability of the funds potential for an "internal" realiotment
eligibility of profit vs non-profit systems,
creation of "new" water systems,
newly identified water systems,
eligible uses of the project funds,
ineligible uses of funds (except for the allowance for 4% administration
mentioned above)
technical, financial & managerial capacity of a system,
reimbufsmant of expenditures incurred prior to receipt of a Set-Aside grant,
combining Territorial Set-Aside funds with other sources of money,
matching requirements,
project identification,
project prioritization,
unscheduled emergency projects,
• grant management and oversight, and
• reports to Headquarters.
I ask that you proceed with development and implementation of your
Regional Territorial Set-Aside Programs, The new (FY1999) funds, and the FY1997 and
FY199S funds that in reserve for the Territorial program will be reprogrammed to
you as soon as we receive authority from the Comptroller to do so,
If you have any further questions, give me a call on (202)260-7077, or have
your staff call Ray Enyeart on {202} 260-5551.
Attachments
CC; Walter Andrews (Region 2}
Bruce (Reg«on2)
Mark (Region 2)
Corine Li (RegionS)
Jose Caratini (Region 9)
-------
WSGF
Date Signed: November 17,1998
The Printing Territorial
§1452{j) Other - Of the funds annually under this for grants to
States, the Administrator shall allotments in accordance with 1443{a)(4) for the
Virgin Islands, the Commonwealth of the Northern Islands, American Samoa,
Guam, The grants as provided in this subsection may be provided by the Administrator
to the governments of such areas, to public water in such or to both, to be
used for the public water system expenditures to in (a)(2). The grants,
and grants for the District of Columbia, shall not be deposited in State loan funds. The total
allotment of grants under this section for ail areas described in this subsection in any fiscal
year shall not exceed 0.33 percent of the aggregate amount made available to carry out this
section in that fiscal year.
The of section (a) (2) apply to in the Virgin Islands, the
Commonwealth of the Northern islands, American Samoa, Guam.
§1452{a)(2) Use of funds - Except as otherwise authorized by this title, amounts deposited
in a State loan fund, including loan repayments and interest earned on such amounts, shall be
used only for providing loans or loan guarantees, or as a source of reserve and security for
leveraged loans, the proceeds of which are in a State loan fund under
paragraph (1), or other financial assistance authorized under this section to community water
systems and nonprofit noncommunity systems, other than systems by
agencies-_FJnancia| _agsjstanc^iyLnder thjsj^jrtJQQ may be by a public water system
onlyjor expenditures f not including jDg^itoring,_ppefaji.pn, ...andjnaintenance
expenditures] of a tyj>e.gr category which the Administrator has determined^through
guidance.jtfjUJ^Iitate_CQgipJi_aiice__yfith.nationaJ...primaiv drinking waterjggulatjons
applicable to the system _undgr section ....... 141 2. or otherwise signiflcajTiHyJurther.ihe health
protection objectives of. this title. The funds .rna.v_ajso.be.usgd. to provide toans to a
syste.m^refgrredjpjn section 140114MB} foxlfaejayj^^
described in ..... sectig_n_14gi(4MB)(ilftin. The funjjsjshjiLLnA
real property or interests ...t|iere»n._unjess the acquisition is tg_a._prQj6ct lathorS^gd
seller. Of the amount credited to any
loan fund under this section in any year, 15 shall be
solely for providing loan to public water systems which regularly serve fewer than
10,000 persons to the extent such funds can be obligated for eligible projects of public water
systems,
Attachment 2
-------
AND FOR ALLOTTING
Formula: EPA will use a formula to calculate the annual allotment for the four Territories, The
SOWA says that EPA, "shall make allotments in accordance with section 1443(a)(4)". The
section referenced gives guidance to EPA on how it is to allot grant funds under the Public
Water System Supervision (PWSS) Program. That instructs EPA to allot PWSS grant
funds on the of population, geographical the number of public systems, and
other relevant factors,
After considering and analyzing many formula options, EPA has a formula that:
» uses the five specific factors identified in the SDWA ~ population, geographical
area, community water systems (CWS), nontransient noncommunity water
(NTNCWS), and transient noncommunity water (TNCWS);
• provides each Territory with a minimum allotment;
• information collected through the most recent Drinking Water Infrastructure
Survey (DWINS) as the "other relevant factor"
The information (or input data) to be used for each of the six factors will be taken from the
following sources.
population - will be the popuation figures used in the calculation of the PWSS grants
for the same year. These populations are from the most current Census
Bureau that are available when the tentative PWSS allotments are calculated.
- will be the geographical information in the calculation
of the PWSS grants for the same year. These will be obtained from the most
current Statistical Abstract of the United that is available when the tentative
PWSS allotments are calculated.
numbersof community wafer systems (CWS) - will be the number of systems used in
the calculation of the PWSS grants for the year. These numbers are obtained
from the inventories that are contained in the Drinking Water Information System
(SDWIS) when the tentative PWSS are calculated.
numbers of nontransient noncoirLmunlfyM3l&LsmMmsJ_NTNCWS} - will be a
of the number of systems used in the calculation of the PWSS grants from the
year. The PWSS grant formula all current and active NTNCWs that are contained
in SDWIS. The NTNCWS inventories used In the Territorial program formula will only
include non-profit systems since only non-profit NTNCWSs are eligible to receive
grants from the Territorial Program, The EPA Regional Offices and the Territories will
be responsible for identifying which NTNCWSs are non-profit will provide that
information to EPA HQ prior to calculation of year's allotments,
Attachment 3
-------
- will be a of the
number of systems used in the calculation of the PWSS grants from the year.
The PWSS grant formula all current and active TNCWs that are contained in
SDWIS. The TNCWS inventories used in the Territorial Program formula will only
include non-profit systems since only non-profit TNCWSs are eligible to receive grants
from the Territorial Program. The EPA Regional Offices and the Territories will be
rssponsibie for identifying which TNCWSs are non-profit and will provide that
information to EPA HQ prior to calculation of year's allotments.
- the information for the infrastructure of the
wilt be obtained from the most current Drinking Water Infrastructure Survey
(DWINS). As the DWINS is currently required to be updated every four years, the
same DWINS information will be used for at least four Territorial Program allotments,
The most recent DWINS was published in January 1997. We will use the information
contained in that report for allotment of the FFY1997, FFY1998, FFY1999, FFY2000,
and FFY2001 Territorial appropriations. The next DWINS is scheduled to be published
in February 2001, on scheduled EPA would first be to use the
2001 DWINS report for allotment of the FY2002 Territorial Program budget request and
appropriation. The February 2001 DWINS report would be for allotment of
the FFY2003, FFY2004, and FFY2005 Territorial Program funds.
formula structure - The Territorial Program formula will value the five traditional factors
at 25% of their PWSS formula weights and the DWINS needs at 75%. The resultant
individual weights will be: population - 5%, geographical - 2.5%, combined CWS &
NTNCWS -14%, TNCWS - 3.5%, and DWINS needs - 75%. In addition, like the
PWSS formula, the Territorial Program formula will provide each of the four Territories
with a minimum allotment. The minimum shall be either $150,000 or 7,5% of the funds
available for the Territorial program, whichever is greater. The intent of this minimum is
to ensure Territory has the ability to fund at one project, year,
while at the same time trying to distribute as much of the money as in
accordance with the relative needs of the public water systems in each Territory.
Schedule: EPA HQ will use the formula 'twice during each federal fiscal year. The first
calculation will be ajentatiye allotment and will be based on the President's budget request,
the most recent DWiNS, and the collection of the information necessary to run the PWSS
grant formula. The budget submission historically occurs in late January or February of
year, and the PWSS grant formula information is collected during the timeframe.
However, since the NTNCWS and TNCWS will be limited to the non-profit systems,
the inventory for those categories will be to EPA Region's 2 and 9 for adjustment,
Once these adjustments are received, EPA HQ will calculate the tentative allotments- EPA's
goal will be to complete the calculation by late February or early March of year.
EPA cannot guarantee that the Regional offices or Territories will actually receive the
level of funding identified in the tentative allotments, however, since they are on the
amount of funds that are "requested" from Congress, The purpose of the allotments
is to provide Territories and EPA's Regional offices with planning on which to their
funding for the coming fiscal year.
Attachment 3
-------
When EPA its appropriation for the year, typically in late or early fall,
EPA HQ will use the formula to calculate the final (actual) allotments for the year. We will use
the PWSS formula and DWINS information to calculate the final allotments as was
to calculate the tentative allotments for the year, even if more current information has become
available. This practice will avoid major changes between the tentative and final allotments,
and will provide Regions and Territorial governments with as much stability as possible
between the planning and execution phases. If the funds appropriated to EPA are the
as were requested in the President's budget, the final allotments will be the as the
tentative allotments. The only thing that will the allotments to be different than the
tentative allotments is an appropriation that is different than the
Input Data for Distribution of FY1997. and Funds:
VI
AS
GU
NMI
Population1
97,000
82,000
181,000
54,000
Total Geo
Area1
171
90
217
189
CWS
132
21
10
30
NTMCWS2
79
0
0
0
TNCWS*
2
0
0
0
Needs Survey Needs
$223,100,000'
$22,500,000
5108,700,000
$35,100,000
Population and Geographical area is same as was used to ca/co/ale the FY 1999 PWSS Grants
This is most current data and was used each of the first three years,
Includes only non-profit water systems since only the non-profit NTNCWSs and TMCWSs wi be
for project funding. Statistics on profit vs non-profit were provided by EPA Regional
Offices,
Formula for FY1997 and FY1998. and Tentative for FY1999
VI
AS
GU
NMi
Total
FY 1997 (Actual)
At SRF Appropriation of
$1,275,000,000
$2,438,200
$310,900
$991,600
$403,700
$4,144.400
FY 1998 (Actual)
At SRF Appropriation of
$725,000,000
51,382,500
5178,300
$562,300
$228,900
$2,350,000
FY 1999(Tenfafwe)
At President's SRF Budget
Request of
$775,000,000
$1 ,449,000
$184,800
$589,300
$239,900
$2,463,000
Attachment 3
------- |