EPA Affirms Extended Term Financing through the CWSRF

The Office of Water has issued a statement affirming EPA’s policy to allow states to purchase or refinance municipal debt ...

The Office of Water has issued a statement affirming EPA’s policy to allow states to purchase or refinance municipal debt through Clean Water State Revolving Funds (CWSRF) with terms exceeding 20 years.

The Clean Water Act (CWA) authorizes the CWSRF program to provide loans for water quality purposes with terms up to 20 years. However, since the CWA does not directly limit the term of transactions for purchasing or refinancing local debt, it has been EPA’s policy to permit purchase or refinance transactions to exceed 20 years.

In 2005, the Office of the Inspector General (OIG) performed a financial audit of the Utah clean water state revolving fund. The OIG found that Utah was violating the CWA by purchasing communities’ bonds with 30-year repayment terms. The OIG recommended that Utah restructure these agreements and that EPA cease allowing states to follow EPA’s policy on extended term financing. Based on a review of the statute, the legislative history, EPA regulations and consultation with the Office of General Counsel, EPA concluded that the CWA does allow a State managing the CWSRF to purchase municipal debt obligations where the terms exceed 20 years.

The statement issued by the Office of Water upholds the extended term financing policy by allowing states to use, as appropriate, the practice of purchasing local debt with terms greater than 20 years and maintains this flexibility for other states that wish to take advantage of the practice.

A copy of the Policy Statement on Extended Financing Terms Under the Clean Water Act State Revolving Fund Program is available on the OWM web site at http://epa.gov/owm/cwfinance/cwsrf/law.htm.

New Studies to Help Finalize Ground Water Rule

USEPA recently sought comment on seven additional studies that it might use to finalize the Ground Water Rule (GWR) that was proposed in May 2000 and is scheduled to be promulgated later this year.

As detailed in a March 27 Federal Register notice, the agency sought comment on studies that have emerged since the GWR was proposed that address the occurrence of pathogens and fecal-contamination indicators in groundwater. The additional occurrence studies include:

A 1995 study of enteroviruses and coliphage in two wells serving Missoula, Mont., by DeBorde et al; a 2002 study of pathogens and indicators in Pennsylvania noncommunity wells by the US Geological Survey (Lindsey et al); a 2003 study of various fecal indicators in 26 wells in New Jersey by Atherholt et al; a 2003/2004 study on microbial indicators in wells in 11 states by Karim et al; a 2004 study vulnerability of the vulnerability of six wells in La Crosse, Wis., to enteric virus contamination by Borchardt et al; a 2004 study of viral contamination and microbiological indicators of fecal contamination in 38 small system wells in Southeast Michigan by Francy et al; and a 2006 study by USEPA that evaluated EPA Methods 1601 and 1602 in detecting coliphages in groundwater.

USEPA said it has re-evaluated 16 earlier studies and examined data from the seven additional ones, some of which “demonstrate actual pathogen and/or fecal indicator presence in ground water at detectable levels.” The agency also stated it “believes that, when considered collectively, these studies inform EPA’s understanding of the national occurrence of viruses and fecal indicators and confirm that certain public ground water systems may be at risk of fecal contamination, which may pose a threat to public health.”

USEPA late last year entered a consent agreement to promulgate the long-delayed GWR by August 2006.

EPA, Corps Propose New Wetlands Rules

EPA and U.S. Army Corps of Engineers (Corps) are proposing a new rule to ensure more effective wetlands restoration and preservation nationwide. The agencies’ rule, being published for public comment, proposes improved science and results-oriented standards to increase the quality and effectiveness of wetlands conservation practices under the Clean Water Act (CWA).

“We are accelerating the pace of wetlands restoration and conservation,” said Benjamin H. Grumbles, U.S. EPA assistant administrator for Water. “Today’s action which emphasizes the best available science, promotes innovation, and focuses on results will help our nation meet the President’s ambitious wetlands goal, while promoting flexibility and accountability.”

“We are focusing on a watershed approach for improving wetlands conservation in this proposed rule,” said John Paul Woodley Jr., assistant secretary of the Army (Civil Works). “This approach helps us fulfill the promise President Bush has made to protect, improve and create new wetlands and other aquatic resources.”

Because wetlands play such a critical role in the environment, a project proposed to be built in wetlands is first subject to review by the Corps and EPA under the CWA. Consistent with the goal of “no net loss of wetlands,” this review often requires a developer to restore or create a wetland to replace the one that was impacted by the project.

The proposed rule:

• Responds to recommendations of the National Research Council to improve the success of wetland restoration and replacement projects;
• Sets clear science-based and results-oriented standards nationwide while allowing for regional variations;
• Increases and expands public participation;
• Encourages watershed-based decisions; and
• Affirms the “wetlands mitigation sequence” requiring that proposed projects fully avoid and minimize potential wetland impacts.

By focusing on results and accountability, EPA hopes the proposed standards will improve the quality and effectiveness of wetland replacement projects. Most importantly, the proposal establishes a “level playing field” ensuring that all forms of wetlands conservation satisfy the same environmental standards.

Increased reliance on innovative, market-based approaches is expected to promote the expansion of wetland banking, which is one of the most reliable and environmentally effective methods of wetland replacement. A wetland bank is a wetland, stream, or other aquatic resource area that has been restored and protected to offset permitted impacts to wetlands or other aquatic resources.

Wetlands provide important environmental functions including protecting and improving water quality and providing habitat to fish and wildlife. Wetlands are also critically important areas for storing floodwaters and can reduce damage from storm surges caused by hurricanes.

For more information regarding compensatory mitigation and how to provide comments on the proposed standards, see: http://www.epa.gov/wetlandsmitigation.

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