UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D C. 20460
MAR -1 2010
WSG 181
Date Signed: March 1, 2010
OFFICE OF
WATER
MEMORANDUM
SUBJECT: Eligibility for. States to use Drinking Water State Revolving Fund Capacity
Devej9pm£nt Set-aside for LT2 Cryp'osporidium Monitoring
FROM: StepfJCTTTTHlare7t)»rector
Drinking Water Protection Division
TO: Drinking Water Branch Chiefs
Regions I-X
Among other purposes, the State Revolving Fund (SRF) set-aside funds may be used for
capacity development as part of a State's strategy to build technical, financial, and managerial
capacity of public water systems. The purpose of this memorandum is to further clarify the
September 4, 2003, policy on "Eligibility of Routine Compliance Monitoring Costs under the
Drinking Water State Revolving Fund (DWSRF) Capacity Development Set-Aside" (DWSRF
03-04) by specifying that states may use SRF set-aside funds under Safe Drinking Water Act
(SDWA) Section 1452(k)(l)(B) for Cryptosporidiiu.i monitoring under the Long Term 2
Enhanced Surface Water Treatment Rule (LT2). It is timely to provide this additional, updated
clarification of DWSRF 03-04 to address the situations where the use of such set-aside funding
maybe permissible and appropriate in implementation of LT2 for existing public water systems
serving less than 10,000 people.
The LT2 requires public water systems to either conduct investigative monitoring of their
source water to determine vulnerability to Cryptosporidium or commit to installing maximum
treatment. To reduce burden, water systems serving less than 10,000 people could have chosen
first to monitor E. coli in their source water for a 12 month period. At the end of this period,
those water systems with an annual mean E. coli results exceeding "Trigger Levels" specified by
the rule are required to either monitor for Cryptospcridium in their source water or install
maximum treatment. The LT2 specifies that water systems serving less than 10,000 people and
monitoring for Cryptosporidium have up to 24 mon hs to complete the monitoring which is to
begin no later than April 2010.
The policy underlying DWSRF 03-04 is bassd on the Congressional mandate for the
capacity development program to foster the indeperdent sustainability of public water systems
by providing assistance to systems ".. .in acquiring -uid maintaining technical, managerial and
financial capacity" (section 1420(c) of SDWA). Capacity development set-aside funds are not
intended as ongoing subsidies for continuing activities that are utility responsibilities - such as
routine compliance monitoring - and cannot be funded through the DWSRF.
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WSGH
Date Signed: March 1, 2010
However, DWSRF capacity development set-aside funds can be applied to clearly
defined demonstration purposes at public water systems as part of a thorough plan to develop
system capacity for the long term.
This means that assistance can be given to public water systems serving less than 10,000
people to support their first-round Cryptosporidium investigative source water monitoring as
described in the LT2. The investigative monitoring the LT2 describes is for a fixed period (e.g.,
twice per month for 12 months or once a month for 24 months), and must follow sample
collection and analysis procedures in accordance with the requirements of the rule. The data
collected will be used to determine what, if any, treatment changes are required to comply with
LT2 requirements. Public water systems collecting source water quality data will be better
situated to make decisions about appropriate capital improvements if necessary, and better
prepared developing plans to become sustainable. Public water systems receiving assistance
should be made aware the support is only for the first-round of Cryptosporidium monitoring as
described in the LT2. The rule also specifies that a second-round of monitoring will occur
approximately six years following the first round, and the public water system are expected to
make preparations to meet the future LT2 Cryptosporidium monitoring requirements without set-
aside assistance.
EPA acknowledges distribution of any set-aside funds is at the discretion of each state,
that states are not obligated to provide the above-described assistance to public water systems
and will need to balance that potential use of set-asides funds with other possible uses. Where
states choose to provide assistance as described in this memorandum, the state-by-state specifics
of such programs using the 1452(k)(l)(B) set-aside will need to be negotiated between states and
their EPA Regional office consistent with this policy and be consistent with a state's capacity
development strategy.
If you have questions, please let me know or you may contact Adrienne Harris (202-250-
8793).
Cc: DWSRF Program Managers, EPA Regions I-X
DWSRF Program Coordinators, EPA Regions I-X
Capacity Development Coordinators, EPA Regions I-X
M-DBP Workgroup Members, EPA Regions I-X
James Taft, Executive Director, Association of State Drinking Water Administrators
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