A EPA
Develop rig Water System Partnerships with the
Drinking Water State Revolving Fund
Communities may use the Drinking Water State Revolving Fund (DWSRF) to develop
partnerships for their drinking water systems.
BACKGROUND
Partnerships among drinking water systems address
common challenges that water systems face, further
increasing public health through leveraging of existing
resources. Through partnerships, water systems may
reduce costs, increase operational efficiency, and
decrease vulnerability to disaster and emergency
situations. There are four general categories of water
system partnerships: informal cooperation,
contractual assistance, joint power agency, and
ownership transfer. Partnerships can be created
through informal agreements, contracting for
operations and maintenance services, or mergers and
acquisitions. Overall, partnerships have the ability to
strengthen the technical, managerial, and financial
capacity of water systems, as well as provide more
reliable services to customers.
DWSRF ASSISTANCE
The DWSRF can provide financial assistance to
publicly owned and privately owned community water
systems and 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 Safe Drinking Water Act (SDWA).
Each of the 50 states and Puerto Rico operates its
own DWSRF program. They receive annual
capitalization grants from the U.S. Environmental
Protection Agency (EPA), which they use to provide
low-interest loans and other types of assistance to
water systems. 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.
Additional Resources on Partnerships:
Resources for Beginning a Partnership:
https://www.epa.aov/dwcapacitv/water-svstem-DartnerhiPS
DWSRF Set-Aside Handbook:
https://www.epa.aov/sites/production/files/2017-
10/documents/finai dwsrf 2017 report 508compiiant.pdf
DWSRF Eligibility Handbook:
https://www.epa.aov/dwsrf/dwsrf-eliaibilitv-handbook
4 OFFICE OF GROUND WATER
AND DRINKING WATER

-------
EPA OGWDW | Developing Water System Partnerships with the DWSRF
EPA 816-F-21-002 August 2021
Additionally, states may use a portion of their
capitalization grant from EPA as "set-asides" to help
communities build the technical, managerial, and
financial capacities of their systems. With an
emphasis on small systems, these funds help ensure
sustainable infrastructure and public health
investments.
Infrastructure
DWSRF assistance can be used for partnership-
related projects involving infrastructure. The most
common projects include the purchase of a water
system and all its assets (including land and water
rights) or the physical interconnection of two or
more water systems. Additionally, the creation of a
new regional water system, which combines several
existing water systems under one new management
structure, would be eligible.
Set-Aside Activities
DWSRF set-asides can be used to assist with a wide
variety of activities - from evaluating water system
alternatives, to negotiating partnership agreements,
to developing resources to promote water system
partnerships.
Planning
Planning activities to evaluate alternatives can
include a study of consolidation (managerial and
physical) potential, the assessment of a regional
water supply to evaluate options for meeting the
long-term water supply needs of underserved areas
in a state, or the development of a preliminary
engineering report for regionalization assessments
between two or more systems. Since these
evaluations are likely to result in a capital
improvement project, assistance can also be
provided from the loan fund. States can also
conduct a state-wide regionalization study to map
out a plan for which water systems need technical,
managerial, and/or financial capacity assistance.
Negotiation
States can provide assistance to water systems to
develop partnership agreements. States can contract
with technical assistance providers to assist water
systems in physical and/or managerial restructuring,
including rate studies. Set-asides can also be used to
assist with legal costs, connection fees, or any
permitting that might be required.
Outreach
Set-asides can also be used to develop targeted
outreach to water systems that may need to consider
consolidation or other forms of partnerships. States
can develop training or state guidance for purchase
agreements, in order to assist with promoting water
system partnerships.
Emergency Response
DWSRF set-asides can also be used for emergency
response planning and related partnership
opportunities. These activities can include, but are not
limited to, facilitating emergency preparedness
training for drinking water program emergency
response teams, contracting with technical assistance
providers or water associations for aid to systems
during emergencies and disasters, and preparing
guidance regarding collaboration and coordination
with community emergency management agencies
and sharing of resources.
APPLY FOR FUNDING
Water systems receive DWSRF assistance directly
from state agencies. Each state has its own application
procedure. Contact information for each state is
posted at: https://www.epa.aov/dwsrf/statedwsrf-
website-and-contacts.
Water System Partnerships Handbook
The Handbook is an interactive tool to assist state
drinking water programs in identifying, assessing,
and implementing water system partnerships. A copy
can be found here.

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

-------
oEPA
How communities are using the Drinking Water State Revolving Fund to develop partnerships
for their drinking water systems.
Drinking Water State Revolving Fund Case
Studies: Partnerships in Action
FRAZIER PARK PUBLIC UTILITY DISTRICT, CA
Three disadvantaged communities in Kern County
formed a regional water system to serve the needs
of about 4,000 people. Previously, the Frazier Park
Public Utility District's water system had aging
water mains with wells that either needed to be
repaired or replaced. The Lake of the Woods
Mutual Water Company had water shortage
problems and violations with the nitrate and
fluoride maximum contaminant levels (MCLs), and
Lake of the Woods Mobile Village had been out of
compliance with the nitrate MCL. Furthermore,
groundwater levels had dropped in the area due
to drought, but accessible groundwater remained
on the eastern side of the valley/basin in this area.
For this reason, in addition to the size and
technical, managerial, and financial capacity of the
district, the communities decided to form a
regional water system. Using approximately $1
million in DWSRF assistance, the district designed
and drilled two new test wells (with budget for a third
should one fail) and interconnected the water
systems with distribution and transmission mains,
storage tanks, and booster pump stations, as
needed.
TILLAMOOK, OR
Using approximately $20,000 in DWSRF funding, the
City of Tillamook procured consulting services to
develop a methodology for the consolidation of 12
nearby drinking water systems into the city's drinking
water system. This evaluation included identifying
equitable costs for each party and the additional
costs the city would incur with the consolidation.
Further serving this community of 5,000 people, the
city was required by the state to complete an asset
management plan and community engagement.
Check out EPA's interactive website for water
system partnerships from across the country
here.
4 OFFICE OF GROUND WATER
AND DRINKING WATER

-------
EPA OGWDW | DWSRF Case Studies: Partnerships
EPA 816-F-21-002 August 2021
WILDERNESS PUBLIC SERVICE DISTRICT, WV
A feasibility study that was developed for the WV
Department of Environmental Protection's Office of
Abandoned Mine Lands determined that pre-1977
mining had impacted half of the White Water Road
project area's water sources. The conclusion of this
study was to interconnect The Wilderness Public
Service District (PSD) with Gauley River PSD
Potable Water System, which uses the
Summersville Regional Water Plant as their source
of water.
Nicholas County received over $2 million in DWSRF
funding to conduct this study, as well as to
construct a water distribution system for the White
Water Road Interconnect Project, which connects
the Wilderness PSD to the Gauley River PSD's 8-
inch waterline. This project included installing a
100-gallon per minute booster pump station with
telemetry and an emergency power generator, as
well as approximately 1.4 miles of 8-inch PVC water
main along White Water Road. This connection now
provides service for about 5,000 people.
LINDENHURST, IL
The Village of Lindenhurst was facing an uncertain
future with regards to its water supply. The village's
water came from underground aquifers that had
limited capacity and were susceptible to
contaminants. Therefore, the village received two
DWSRF loans totaling $17 million for water
distribution system improvements. This project
allowed the village, a community of about 14,500
people, to connect to the Central Lake County Joint
Action Water Agency, a nearby regional water
system supplied with surface water from Lake
Michigan. The first phase of the project included
site preparation work to remove contaminated soil
and the removal of 15,000 linear feet (LF) of
existing water mains. The second phase of this
project included 23,000 LF of new water mains, as
well as valves, service lines, a one million-gallon
storage tank with mixing system, and other
appurtenances.
CLIFTON, NY
The Town of Clifton received $1.2 million in DWSRF
assistance to consolidate one of the water systems
it operates, the Woodhaven Water District, with the
Town of Fine's Star Lake Water District. The Star
Lake Water District was extended to the Newton
Falls Water District, another system that the town of
Clifton operates, to provide services to the former
J&.L site, Benson Mines, and the Hamlet of Newton
Falls. This project allowed the town to decommission
their existing surface water treatment plant, a
272,000-gallon storage tank, as well as eliminate
mechanical and electrical equipment that was at the
end of its useful life. This project ensured a
sustainable source of safe, potable water to the
roughly 350 residents of the Woodhaven Water
District for many years to come. By consolidating
these water systems, this project reduced operating
expenses by 47 percent and eliminated future
equipment replacement costs.
INCENTIVES FOR CONSOLIDATION IN
WASHINGTON
For several years, Washington used the Local
Assistance Set-Aside (i.e. 15 percent) to encourage
water system consolidation by providing funding for
water system connection fees, developing feasibility
studies for water systems considering consolidation,
and offering pre-construction grants that cover some
of the costs of planning and design. While these
activities used to be funded through DWSRF set-
asides, they are now funded using loan origination
fees. The intent is to provide greater public health
protection by switching service from a water system
lacking capacity to one that can provide clean and
safe drinking water reliably.

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

-------