Protecting Source Water with the
Drinking Water State Revolving Fund Set-Asides
States and communities may use the Drinking Water State Revolving Fund (DWSRF) set-asides
to safeguard sources of drinking water.
BACKGROUND
Protecting sources of drinking water can proactively
safeguard the water we drink and improve our public
health. Taking steps to manage potential sources of
contamination and to prevent pollutants from
reaching sources of drinking water can often be more
efficient and cost-effective than treating drinking
water downstream.
The Safe Drinking Water Act (SDWA) Amendments of
1996 required each state to develop a comprehensive
Source Water Assessment Program and to complete
source water assessments for each public water
system. These assessments, which states made
available to the public, include a delineation of the
areas needed to protect the drinking water source, an
inventory of potential contaminant sources, and a
determination of the water system's susceptibility to
contamination. While there is no requirement in the
SDWA to update these assessments, the America's
Water Infrastructure Act (AWIA) explicitly re-
authorized the use of Drinking Water State Revolving
Fund (DWSRF) set-aside funds for this purpose. The
AWIA also expanded the eligibilities for set-aside
expenditures on source water protection (SWP)
activities and re-authorized states to establish source
water petition programs that can investigate the
origins of pollution to reduce levels of contamination,
establish partnerships for SWP, and develop
recommendations for long-term SWP strategies.
DWSRF ASSISTANCE
The DWSRF can provide financial assistance to
publicly-owned and privately-owned community water
systems, as well as non-profit non-community water
systems, for drinking water infrastructure projects.
Projects must either facilitate the system's compliance
with national primary drinking water regulations or
significantly further the health protection objectives of
the SDWA.
Each of the 50 states and Puerto Rico operates its own
DWSRF program. They receive annual capitalization
grants from the EPA, which in turn provide low-
interest loans and other types of assistance to water
systems.
Additional Source Water Protection Resources:
EPA's Source Water Protection page:
epa.Qov/sourcewaterprotection
The Clean Water SRF Program: epa.gov/cwsrf
The Source Water Collaborative: sourcewatercollaborative.org
A OFFICE OF GROUND WATER
® AND DRINKING WATER

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EPA OGWDW | Protecting Source Water with the DWSRF Set-Asides
Repayments of DWSRF loans begin up to 18 months
after project completion, with loan terms up to 30 years
for most communities, or up to 40 years for
disadvantaged communities.
Additionally, states may use a portion of their
capitalization grant from the EPA as "set-asides" to help
communities build the technical, managerial, and
financial capacities of their systems. States may use the
set-asides to fund several types of SWP activities. They
may administer the SWP program, provide technical
assistance, and fund implementation activities.
SET-ASIDES USE FOR SWP
The State Program Management (i.e., 10 percent) and
Local Assistance and Other State Programs (i.e., 15
percent) set-asides are commonly used to support SWP
programs and initiatives. States submit set-aside
workplans to the EPA each year describing activities for
which they intend to use their set-asides and how funds
will be spent.
The State Program Management set-aside is most
commonly used to support staff in the state's SWP
program (e.g., a SWP coordinator) or other technical
assistance providers (e.g., circuit riders or
hydrogeologists). The Local Assistance and Other State
Programs set-aside has broader eligibilities and allows
states to provide assistance through loans or grants,
depending on the activity and recipient of the funds.
In brief, for SWP, the Local Assistance Set-Aside may
be used to:
•	Make loans to public water systems for
purchasing land or conservation easements for
the purpose of SWP;
•	Make loans to community water systems for
implementing source water protection petition
programs or voluntary, incentive-based SWP
measures;
•	Make expenditures to delineate, assess, and/or
update SWP areas; and
•	Make expenditures to establish and implement
wellhead protection programs, and to implement
efforts to protect source water.
EPA 816-F-19-003 October 2019
Examples of activities that can be supported by the
Local Assistance set-aside include:
•	Updating source water assessments,
•	Developing and implementing SWP plans,
•	Land acquisition and conservation easements,
•	Well abandonment,
•	Cover crops and other best management
practices,
•	Building fences to protect water sources,
•	Septic system surveys and replacement,
•	Outreach and education, and
•	Development of local ordinances to protect
source waters.
States may provide support through various
mechanisms such as loans to public water systems,
grants to local communities, funding of technical
service providers, or grants to nonprofit
organizations. More information on eligibilities can be
found in the DWSRF Eligibility Handbook:
https://www.epa.aov/dwsrf/dwsrf-eliaibilities.
LEVERAGING SET-ASIDES TO ADVANCE SWP
Even small investments can play an important role in
advancing SWP. Set-aside funds can help not only
through direct action, but also coordination with other
programs charged with protecting and improving
freshwater resources and public health. For example,
several states have used DWSRF set-aside funds to
develop assessments, appraisals, and plans to meet
application requirements for Clean Water State
Revolving Funds and Clean Water Act section 319
Nonpoint Source Management grants. Some states
have used set-aside funds to support staff who
research and prepare applications for funding
opportunities or who coordinate with other
organizations to identify priority areas for
conservation investment (e.g., United States
Department of Agriculture conservation programs).
LEARN MORE ABOUT FUNDING
DWSRF assistance is distributed directly from state
agencies. Each state has its own funding procedure.
Contact information for each state is posted at
https://www.epa.aov/drinkinawatersrf/state-dwsrf-
website-and-contacts.

> For more information, visit: epa.gov/dwsrf

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DWSRF Set-Asides Case Studies: Source Water Protection
How states and communities are using the Drinking Water State Revolving Fund (DWSRF)
set-asides to safeguard sources of drinking water.
NEBRASKA: DRINKING WATER PROTECTION
MANAGEMENT PLANS
The Nebraska Department of Environment and Energy
(NDEE) uses their DWSRF set-asides to support the
development of groundwater-focused planning
documents which help Community Water Systems
access funding to address nonpoint sources of
pollution. Plans are developed by communities using
source water protection grants funded by the DWSRF
15 percent Local Assistance set-aside. These plans are
written to meet the requirements of an Alternative to
an EPA 9-Element Watershed Management Plan.
Once accepted, the plans will be eligible for EPA Clean
Water Act section 319 grant funds. If awarded, these
grant funds may be used to implement the actions
outlined in the plans, including on-the-ground best
management practices and public outreach to address
nitrate contamination in the aquifer. Currently, two of
these groundwater-focused plans are also being used
to access targeted funding for financial and technical
assistance from the National Water Quality Initiative
(NWQI) of the USDA Natural Resources Conservation
Service (NRCS) and have resulted in over $500,000
for implementation of voluntary conservation
practices to landowners.
In addition, NDEE is collaborating with USDA NRCS to
prioritize wellhead protection areas for source water
protection funding included in the 2018 Farm Bill,
The 2018 Farm Bill makes $2-3 million available
annually for source water protection in Nebraska to
be invested in delineated source water protection or
wellhead protection areas. The DWSRF 15 percent
set-aside funds will be used by NDEE to update the
delineations of wellhead protection areas from 20-
year time-of-travel to 50-year time-of-travel,
expanding the areas eligible for USDA NRCS
investment in source water protection
activities. Funding for source water planning has
been limited in the past and this collaboration
between planning and implementation funding
sources opens new opportunities for source water
protection.
Additional Source Water Protection Resources:
EPA's Source Water Protection page:
eDa.aov/sourcewaterprotection
The Clean Water SRF Program: epa.gov/cwsrf
The Source Water Collaborative: sourcewatercollaborative.org
A OFFICE OF GROUND WATER
® AND DRINKING WATER

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EPA OGWDW | DWSRF Set-Asides Case Studies: Source Water Protection
DELAWARE: COVER CROPS FOR PROTECTION
The Delaware DWSRF program partnered with the
Sussex County Conservation District (SCCD) and the
Delaware Rural Water Association (DRWA) to conduct a
source water protection pilot. The objective was to work
with both the agriculture and water utility communities
to ensure all agricultural land surrounding high-risk
public wells participated in a cover crop program. The
state's DWSRF program worked with the SCCD to
complete GIS mapping of high-risk public wells and
financially supplement the cover crop program. The
state also worked with the DRWA to identify high-risk
public wells throughout Sussex County. This pilot,
funded with $250,000 from the DWSRF 15 percent
Local Assistance set-aside, implemented 5,555 acres of
cover crops. Based on the success of the pilot, the goal
is to expand this program to the two other Delaware
counties in the future and further promote drinking
water protection through cover crops.
WASHINGTON: LEVERAGING FOR LAND
The Skagit Public Utility District (PUD) provides drinking
water to more than 65,000 people in Skagit County,
serving three cities as well as suburban and rural areas.
The Gilligan Creek area of the Cultus Mountain
Watershed provides 45 percent of the PUD's source
water for its Judy Reservoir Water System. Until
recently, timber companies owned all property around
Gilligan Creek. Using a grant and a loan from two state
agencies, Skagit PUD purchased and protected 250
acres of critical watershed area in perpetuity for its
customers. The grant, funded with the DWSRF 15
percent Local Assistance Source Water Protection set-
aside through the Washington Department of Health,
was used by the PUD for appraisal and survey of the
property early in the process.
EPA 816-F-19-004 October 2019
Knowing the approximate value and exact portion of
the property helped the utility negotiate with the
property owner and clearly identify a cost to rate
payers for the PUD board of commissioners to
consider. The PUD subsequently purchased the land
in 2019 with a $1.53 million Clean Water State
Revolving Fund loan through the Washington
Department of Ecology. The loan included 25 percent
principal forgiveness, which reduced the amount
owed on the loan. The PUD will pay back the loan
through customer revenues and proceeds from
selective timber harvests. This collaboration between
multiple state agencies and funding sources resulted
in a successful priority drinking water protection
project.
MAINE: LAND CONSERVATION
The Portland Water District (the District) is Maine's
largest water utility. Its source, Sebago Lake, is a
multi-use lake with excellent water quality. The
greatest challenge to the long-term protection of lake
water quality is potential development pressure in the
mostly privately-owned watershed. In response, the
District developed a Watershed Land Conservation
Program, which provides funding toward forest
conservation. In 2019, the District approved the
purchase of a $345,000 conservation easement on a
1,417 acre property known as the Tiger Hill
Community Forest. The property is located within two
miles of the drinking water source and its
conservation will ensure that it remains forested in
perpetuity. The District is using the Maine DWSRF's
land acquisition loan program under the 15 percent
set-aside, which offers a low interest rate and up to
$50,000 principal forgiveness, reducing the amount
owed on the loan. This source water protection
project, scheduled for completion in fall 2019,
benefits the District and its rate payers by protecting
their drinking water source.
LEARN MORE ABOUT FUNDING
DWSRF assistance is distributed directly from state
agencies. Each state has its own procedure. Contact
information for each state is posted at
https://www.epa.aov/drinkinawatersrf/state-dwsrf-
website-and-contacts.
C
For more information, visit: epa.gov/dwsrf

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