Final Intended Use Plan for the New York State Drinking Water State Revolving Fund

Attachment VII
Response to Comments on the Draft Intended Use Plan

The following response to public comments was prepared to address the public's comments on the Drinking Water State Revolving Fund's (DWSRF) draft Intended Use Plan (IUP) that was issued on June 22, 2005. The public was invited to comment on the draft IUP at a hearing held in Albany, New York on July 21, 2005. The public comment period ended on August 12, 2005. In addition to the comments addressed herein, a number of project specific comments were received and addressed on an individual basis. Specific changes made to the project priority lists included in the draft IUP are outlined at the end of this responsiveness summary as Appendix 1.


Many of the loans seem to support activities that encourage a pattern of development commonly known as "sprawl".


The SDWA and DWSRF guidelines specifically prohibit the use of DWSRF money to finance a project solely in anticipation of future population growth. The 1997 DWSRF guidelines state:

"A Fund cannot provide assistance to finance the expansion of any drinking water system solely in anticipation of future population growth (SDWA section 1452(g)(3)(C)). However, assistance may be provided to address population growth expected to occur over the useful life of the facility to be funded. In determining whether or not a project is eligible for assistance, the State must determine the primary purpose of the project. If the primary purpose is to supply or attract growth, the project is not eligible to receive DWSRF funds. If the primary purpose is to solve a compliance or public health problem, the entire project, including the portion necessary to accommodate a reasonable amount of growth over its useful life, is eligible. In reviewing the proposed project, the State should review the basis for, and reasonableness of, the population projections.

A State must also consider the extent of current risk to public health in establishing funding priorities. Consequently, if a project includes substantial growth, it must be placed at the lower end of the priority list. It would be contrary to the intent of Congress, as reflected in the "anticipation of growth" provision, to fund a project with the prospect of a substantial amount of growth ahead of a project where a significant portion is attributable to rectifying a current health threat."

The August 7, 2000 edition of the Federal Register codified the 1997 DSWRF guidelines and further clarified the topic by stating:

"It is clear that Congress did not intend for DWSRF program funds to be used to expand drinking water facilities solely in anticipation of future population growth. However, when read together, the language of the SDWA and its legislative history demonstrate that Congress did allow for the use of DWSRF program funds to accommodate a reasonable amount of population growth, which at the time that funding is provided, is expected to occur over the useful life of a facility. This concept is reflected in this interim final rule in Sec. 35.3520(e)(5)."

The design standards that the DOH follows provide for reasonable growth to occur over the useful life of the project. The DOH complies with the SDWA and federal guidelines and regulations and has never allowed the use of DWSRF money to finance a project solely in anticipation of future population growth. Further, EPA conducts regular audits of the DWSRF program, as well as reviews of program criteria and results through various reporting mechanisms and has found that the program is being run in compliance with all requirements.


Scoring of projects does not take into account the existence of alternatives that would incur a lower cost and/or a lesser impact on the environment.


Consistent with the SDWA and DWSRF guidelines, the IUP's project priority ranking system establishes a list of eligible projects to be funded in a manner that the most serious risks to public health are given the highest priority. In the priority ranking system, the highest priority is given to acute public health risks, particularly those related to microbiological organisms. The next priority is given to situations that pose chronic and longer-term risks to consumers, such as organic chemical contamination. The scoring criteria also consider issues that are related to infrastructure upgrading or replacement.

An applicant must provide sufficient documentation and data to support their project need, public health priorities, and project score. In addition, the State Environmental Review Process that incorporates environmental review requirements of the National Environmental Policy Act, the State Environmental Quality Review Act, as well as DOH regulations, applies and must be completed by all DWSRF applicants before receiving funding.

Therefore, we do not concur with your assumption that DWSRF applicants are manipulating the scoring system and not considering potential project impacts on the environment. Various project alternatives, including those with varying costs and environmental benefits, must be considered and provided to the DOH in a project engineering report, which this Department must endorse, prior to a project being placed on the IUP's Readiness List.


Municipalities setting up local water boards or authorities and then selling the water infrastructure to these new entities appear to be doing so merely to circumvent scoring criteria for communities in debt.


To assure the DWSRF is invested wisely, each DWSRF applicant must demonstrate that its water system has adequate technical, managerial, and financial capacity. Therefore, the DWSRF program reviews the technical, managerial, and financial capabilities of each applicant prior to financing a drinking water project. The refinancing of debt or the acquisition of one system by another, which we support from a reliability and dependability basis, does not alter the scoring criteria.