Witness Testimony

Good morning. My name is Jay Rutherford and I am the Director of the Water Supply Division for the Vermont Department of Environmental Conservation. I am here today as the past President of the Association of State Drinking Water Administrators (ASDWA). ASDWA represents the drinking water programs in each of the fifty states and territories in their efforts to ensure the provision of safe, potable drinking water to more than 275 million consumers nationwide. ASDWA's primary mission is the protection of public health through the effective management of state drinking water programs that implement the Safe Drinking Water Act (SDWA). My focus for today's testimony revolves around three key themes:

• Addressing concerns related to the Lead and Copper Rule
• Strategic approaches to meet water infrastructure needs
• Consideration of state needs to meet Safe Drinking Water Act requirements

Challenging Issues for State Drinking Water Administrators: Lead and Copper Rule; Emerging Contaminants

The Lead and Copper Rule

There are an array of very challenging elements that comprise state drinking water programs. Among the more challenging is the lead and copper rule. Based on the recent events in Washington, D.C., states have reviewed the performance of water systems in their states and determined that the events in our nation's capitol are an isolated anomaly and not indicative of a wide-spread national issue. Nevertheless, states welcome the opportunity to work with EPA and other interested stakeholders to review the Lead and Copper Rule and ensure that the public is protected from lead in drinking water. Overall, states believe that the general construct of the Lead and Copper Rule is appropriate and that the rule does not require major revisions. Key state perspectives on the Lead and Copper Rule include:

• Action Level, Not an Maximum Contaminant Level (MCL): The rule construct should retain an action level for lead (as opposed to setting an at-the-tap MCL for lead).
• Public Education: EPA, states, and local communities should build upon and enhance existing programs to educate the public about the hazards of lead and the different ways people are exposed to lead.
• Need for Research: Additional research is needed to better understand some of the key issues related to lead in drinking water and remediation options.
• Definition of "Lead-Free": EPA should investigate whether it would be feasible to reduce the lead percentages included in the SDWA that pipes and fittings can contain and still be considered lead-free (currently 8.0%) and, if it is deemed feasible, work with Congress to amend the SDWA accordingly. In addition, Congress and EPA should review the current statutory and regulatory provisions and time frames with respect to lead service line replacement.
• Lead in Schools and Day Cares: States would consider changes to existing approaches to better address lead at sensitive sites such as schools and day cares, but believe that these facilities should be addressed separately from the typical distribution system requirements.

Emerging Contaminants

In addition to existing regulations, there are a host of emerging contaminants - such as perchlorate and MTBE -- that need to be tracked and addressed in order to continue to ensure public health protection. States support the overall structure set forth in the 1996 amendments to Safe Drinking Water Act (i.e., the Contaminant Candidate List) for addressing emerging contaminants. However, where there are contaminants of nationwide significance that may warrant national regulatory efforts, states urge EPA to resolve the various scientific and engineering issues needed for national determinations as expeditiously as possible. States often don't have the luxury of waiting for the deliberative process to play out at the national level and are often forced to expend resources to develop their own regulatory levels in the interim.

Strategic Approaches to Meeting Drinking Water Infrastructure Needs

Turning to the issue of funding for drinking water infrastructure, I would like to touch upon state perspectives on the Drinking Water State Revolving Loan Fund (DWSRF) program. We believe the DWSRF, a proactive program in place for less than 10 years, has been a real success story in funding infrastructure improvements as well as providing funds for key elements of SDWA implementation. Based on this success, we believe that the DWSRF should continue to be the primary funding vehicle for construction of drinking water infrastructure. We do not believe that creating new funding vehicles would comport well with the momentum developed by the DWSRF program. While additional funding is certainly needed, we would encourage Congress to direct such funding to the DWSRF program. States are in the best position to determine the priority of projects for support by the DWSRF and to work directly with water utilities in this regard.

Among the more challenging utility issues are those posed by small systems. Small systems frequently have poorer economies of scale and thus are often hard hit by new rule provisions and associated infrastructure requirements. States are very sensitive to the concerns of these systems, but believe the most appropriate way to address their needs is through the existing structure of the SDWA, including a number of special provisions of the DWSRF. For instance, loan subsidies as described in the current statute, including principal forgiveness, may be necessary for disadvantaged communities, particularly small communities.

In light of the importance of this program, states believe that the DWSRF program should be reauthorized for a significant period of time, preferably at least ten years. This will enable firm, long-term commitments to be made by states to support the program. In view of the current uncertainties about the duration of the program into the future, it is exceedingly difficult for state drinking water program managers to commit the staff and resources needed to support this program over the long term. Although the SDWA authorized a total of $9.6 billion for Fiscal Years 1995 through 2003, only $5.52 billon was appropriated through Fiscal Year 2003. [Need to update this figure for 2004.]

In addition to a long term reauthorization of the fund, states believe that there are several non-monetary, structural changes in the SDWA that are needed to allow more efficient and effective use of appropriated funds. We recommend that Congress make several specific changes to the DWSRF portion of the SDWA as follows:

• Remove the additional matching requirements (beyond the 20% match already required for the fund) from the 10% set-aside for undertaking certain state drinking water program activities.
• Increase allowable set-aside usage for loan administration from 4% to 6% and allow this set-aside to be used for loan administration or other eligible uses.
• Expand the allowable uses of the 15% set-aside funds related to source water assessment programs to include updating assessments and undertaking implementation activities associated with source water protection areas.
• Extend the time interval between the Needs Surveys from the current four years to six years, with an option for states to perform more frequent surveys if they so desire.

In addition to these specific changes, we also advocate a number of other non-legislative changes in the way that the DWSRF program is administered. We would recommend, for instance, that the administrative requirements for use of the fund (largely addressed in Federal regulations and guidance) be as streamlined as possible.

State Drinking Water Program Needs to Meet SDWA Requirements

So, how does all of this affect state drinking water primacy programs? The short answer is that states are facing the same type of crisis as the utilities that they oversee.

States are responsible for oversight of ongoing regulatory compliance and technical assistance efforts for 160,000 public water systems to ensure that potential health based violations do not occur or are remedied in a timely manner. States are also implementing an array of proactive initiatives to protect public health from "source to tap" -- including source water assessments and controls; technical assistance with water treatment and distribution; and enhancement of overall water system capacity. Further, since September 2001, state drinking water programs have accepted additional responsibilities to work with all public water systems to ensure that critical drinking water infrastructure is protected and that plans are in place to respond to a variety of possible emergency scenarios.

States must accomplish all of these activities and take on new responsibilities while responding to escalating pressures to further cut their budgets, streamline their workforces, and operate with less state-provided financial support. State drinking water programs have always been expected to do more with less and states have always responded with commitment and ingenuity. However, in the current economic climate, state drinking water programs can no longer sustain - much less increase - their productivity without Federal support.

Data to support this crisis condition can be found in the 2003 document entitled Public Health Protection Threatened by Inadequate Resources for State Drinking Water Programs: An Analysis of State Drinking Water Programs Resources, Needs, and Barriers. This compilation of a 50-state self analysis documents a shortfall of approximately $230 million between the funds available to states and the amount needed to fully implement state drinking water programs. This ever-widening gap is projected to grow to approximately $370 million by 2006.

Historically, state drinking water programs have received approximately 85-87 percent of authorized funding levels to support their SDWA mission. States must contribute a 25 percent match to be able to receive Federal PWSS program funds for regulatory oversight and 20 percent to receive their DWSRF funding allocation. Because the needs are so great, states also bring additional dollars to the table through fee programs, general fund allocations, and other sources. However, many states no longer have the luxury - or ability - to continue to overmatch their contributions to support and sustain Federal programs.

Let us not forget that the point of all of this is public health protection. A strong drinking water program supported by the Federal-state partnership will ensure that the quality of drinking water in this country will not deteriorate and, in fact, will continue to improve - so that the public can be assured that a glass of water is safe to drink no matter where they travel or live. States are willing and committed partners. Additional Federal financial assistance is needed, however, to meet new regulatory and security needs. In 1996, Congress provided the authority to ensure that the burden would not go unsupported. In 2004, ASDWA asks that the promise of that support be realized.