This Fiscal Note is not an official copy and should not be quoted or cited.
This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0543 - Expands authority of the public drinking water program within the Department of Natural Resources
COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. NO. 2103-01N
BILL NO. SB 543
SUBJECT: Public Drinking Water
TYPE: Original
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS Net Effect on All State Funds
FUND AFFECTED
FY 1998
FY 1999
FY 2000 General Revenue
($4,371,520)
($1,937,131)
($2,383,016)
Total Estimated
($4,371,520)
($1,937,131)
($2,383,016)
|
ESTIMATED NET EFFECT ON FEDERAL FUNDS | |||
| FUND AFFECTED | FY 1998 | FY 1999 | FY 2000 |
| Public Drinking Water Revolving | $0 | $0 | $0 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
|
ESTIMATED NET EFFECT ON LOCAL FUNDS | |||
| FUND AFFECTED | FY 1998 | FY 1999 | FY 2000 |
| Local Government | (Unknown) | (Unknown) | (Unknown) |
Numbers within parentheses: ( ) indicate costs or losses
This fiscal note contains 8 pages.
FISCAL ANALYSIS
ASSUMPTION
The Department of Health and the Department of Economic development - Public Service Commission assume they would not be fiscally impacted by this proposal.
The Department of Natural Resources (DNR) assumes they would administer the drinking water state revolving loan fund as it does the wastewater state revolving fund, under the Water and Wastewater Loan Fund established under 644.122 RSMo.
DNR assumes Missouri's share of the capitalization grant for federal fiscal year 1997 is $21.8 million. A 20% state match will be required. Funds may be allocated to the programs listed below; unused funds will be available for drinking water state revolving fund (DWSRF) loans.
Failure of the state to implement an adequate Technical, Management, and Financial (TMF) capacity strategy and an adequate operator certification program will result in a loss of 40 % of the DWSRF capitalization grant. DNR plans to implement both of these programs in accordance with federal requirements.
States may annually use up to 10 % of the DWSRF for public water systems supervision programs, to administer or provide technical assistance through source water protection programs, to develop and implement a TMF capacity strategy and for operator certification program. The state must match such expenditures with at least an equal amount of state funds, at least half of which must be in addition to the amount the state expended in FFY 93. DNR assumes this match is in addition to the 20% match mentioned above but based on current expenditures should not require any additional outlay beyond the current planned level.
An additional up to 4 % annually of the DWSRF may be used to cover cost of administration of the program and to provide technical assistance to public water systems.
An additional 2% of the funds may be allocated by the states to provide technical assistance to public water systems serving less than 10,000 people.
Also, up to 15% of the DWSRF may be allocated by the states for source water delineation and wellhead protection programs. As required, more thorough assessments and delineations of public water system sources will be made to retain water quality monitoring flexibility commensurate with the susceptibility to contamination and to assist public water systems in becoming eligible for source water protection loans.
The DNR assumes, as a result of this legislation, they would request 29 FTE and related equipment and expenses, including rent, during the fiscal note period. The FTE and their corresponding duties are listed below by program activity. DNR received six of the 29 positions in its FY 1998 budget, two Environmental Engineers, one Management Analysis Specialist, one Environmental Specialist, one Research Analyst, and one Computer Information Specialist. DNR requested the remaining staff in their FY 1999 budget.
DWSRF Technical Management - (1 FTE) One Environmental Engineer III to develop an intended use plan, including criteria for loan assistance priorities and for determining disadvantaged communities; review engineering documents to ensure compliance with construction requirements, evaluate the technical aspects of projects for compliance with design criteria and for effectiveness in protecting human health, responsible for approving engineering documents for DWSRF projects, and propose legislative and regulatory changes needed to fully implement the DWSRF.
DWSRF Financial Management - (4 FTE) Three Management Analysis Specialists to provide project financial coordination activities. Review financial aspects of applications submitted for drinking water SRF and coordinate the financing of the project. This will involve debt services evaluation/development, project management, response to information requests, user charges, and processing loan documents, and tracking and managing set-aside funds. One Accountant to process payments, provide projections, track and financially evaluate the fund on a continuing basis.
Technical Assistance - (3 FTE) Two Environmental Specialists to assist local government securing loans and grants. One Water Specialist to provide technical assistance to public water systems, which includes on-site assistance with operations and compliance issues; and assist in developing and implementing Community Based Environmental Programs. Assist small communities with technical, managerial, and financial (TMF) self assessments and with securing loans and grants for drinking water facility improvements. Evaluate community user charges which must be revised periodically to finance maintenance, upgrading and expansion. Inform, educate and assist with problems that rise in the operation and maintenance of small water systems.
TMF Capacity Program - (4 FTE) One Environmental Engineer to develop and implement a TMF capacity program that requires the department have the authority to ensure that all new community water systems demonstrate the technical, managerial and financial capacity to comply with the Safe Drinking Water Act, including regulations, training and bonding requirements. Three Environmental Specialist to work with small public water systems on options to maintain TMF capacity.
Source Water Protection Program - (6 FTE) Six Environmental Specialists to develop and implement the source water protection program including delineation and assessments of source water protection areas and establishment of source water quality partnership petition program. Work with small public water systems on options to implement the source water protection program and to provide assistance related to the source water quality partnership petition program.
Source Water Delineation - (3 FTE) Three Geologists to evaluate reasonably available geohydrologic data for each public water supply well, including water flow recharge, discharge, aquifer characteristics, etc., and apply appropriate scientific models and calculations to determine the extent of area around each well that is susceptible to contamination. Determine the "degree of susceptibility" with respect to microbiological and chemical contaminants for each water source. Monitor well network, prepare reports such as groundwater use trends and assure good quality reliable data to delineate boundaries of recharge areas and perform vulnerability assessments. Support work in surface and subsurface hydrogeology with special emphasis on subsurface geologic conditions to determine best rock sources for safe groundwatEr supplies relative to boundary conditions and vulnerability.
Compliance Schedules - (1 FTE) One Environmental Specialist to develop and implement procedures for using administrative orders and penalties; conduct compliance activities, including enforcement of capacity development mandates and new contaminant and construction standards; develop and implement a small system variance program.
SDWIS Adoption - (2 FTE) One Research Analyst to develop and implement the Safe Drinking Water Information System in Missouri. The person will serve as the primary link between the program technical staff and the DNR/EPA computer development staff. This involves overseeing installation of the system, including developing test plans, assembling test data, supervising procedures, coordinating reviews, and making recommendations to computer staff for resolution of problems. One Computer Information Specialist to support the PDWP development projects in all the regions.
Clerical Support - (5 FTE) Five Clerk Typists for general clerical support.
DNR assumes they would require one-time costs of $80,000 for legal consulting services. These costs are the development costs for a cooperative agreement between the department, Public Service Commission, EIERA, Clean Water Commission, and the Safe Drinking Water Commission; for legal fees and expenses to develop notes and loan agreements and review and revise existing indentures and trust agreements; and for expenses involved in the development and review of bid processes for receivership and custodial documents. In addition, DNR would request $25,000 annually for on-going custodial/banking fees for direct loan program and legal fees and expenses for the leveraged program.
DNR assumes they would request $20,000 for audit costs as the federal act requires an audit of the funds.
DNR assumes they would also request $90,500 for five vehicles, $77,000 for water level recorders, and $81,500 for data processing equipment to preform Source Water Assessment, and $2,500 for data downloading field equipment.
The DNR is uncertain of the fiscal impacts resulting from the revisions to the rulemaking authority and procedures.
DNR assumes if the work included in the federal guidance documents exceeds the department expectations, the department may need to request additional resources.
Oversight adjusted DNR's equipment costs and expenses to conform with Office of Administration Guidelines.
As no fund is specified in the proposal, Oversight assumes the state's matching share will come from the General Revenue Fund.
Oversight assumes local governments and water districts will incur additional costs to implement the requirements of the federal safe drinking water act; Oversight assumes this proposal would enable the DNR to provide grants and loans to the local governments for water projects. Oversight assumes the net fiscal impact of this proposal on local governments and water districts is unknown.
The DNR requested 24 FTE in their fiscal note response for H.B. 288 in the 1997 Session. They have requested 29 FTE in this fiscal note. DNR requested the additonal staff in lieu of funds to contract for services.
Six positions, two Environmental Engineers, one Management Analysis Specialist, one Environmental Specialist, one Research Analyst, and one Computer Information Specialist, included in the fiscal note and the related expense and equipment costs totaling $327,426 were incorporated in to DNR's core budget in FY 1998 budget. DNR requested appropriations for the remaining 23 positions in their FY 1999 budget.
| FISCAL IMPACT - State Government | FY 1998 | FY 1999 | FY 2000 |
| GENERAL REVENUE FUND | |||
| Costs - DNR | |||
| State Matching Funds | ($4,371,520) | ($1,937,131) | ($2,383,016) |
| PUBLIC DRINKING WATER | |||
| REVOLVING FUND | |||
| Income - DNR | |||
| Federal Grant Award | $21,857,600 | $9,685,654 | $11,915,080 |
| Costs - DNR | |||
| Personal Service (29 FTE) | ($1,017,800) | ($1,043,245) | ($1,069,327) |
| Fringe Benefits | (285,289) | (292,422) | (299,732) |
| Expense and Equipment | (648,500) | (224,220) | (229,597) |
| Other - Grants and DNR Administration | (19,906,010) | (8,125,767) | (10,316,425) |
| Total Costs - DNR | ($21,857,600) | ($9,685,654) | ($11,915,080) |
|
ESTIMATED NET EFFECT ON | |||
| PUBLIC DRINKING WATER | |||
| REVOLVING FUND | $0 | $0 | $0 |
| FISCAL IMPACT - Local Government | FY 1998 | FY 1999 | FY 2000 |
| Income - Counties, Municipalities, and Water Districts | |||
| Federal Grants and Loans for | |||
| Drinking Water Projects | Unknown | Unknown | Unknown |
| FISCAL IMPACT - Small Business | |||
Small businesses that operate a water system may be impacted by this proposal as they must implement the requirements of the federal safe drinking water act amendment of 1996; Oversight assumes this proposal would enable the DNR to provide grants and loans to some small businesses.
DESCRIPTION
The act with an emergency clause broadens rulemaking authority of the Safe Drinking Water Commission (SDWC) to cover the requirements of the federal Safe Drinking Water Act. The SDWC shall establish criteria for priorities for drinking water loans and shall develop an Intended Use Plan for funding such loans to submit to the Clean Water Commission. The Department of Natural Resources shall certify public water system operators. Rules of the Safe Drinking Water Commission shall be promulgated pursuant to Chapter 536, RSMo. Existing rules authority is repealed, but existing rules are not affected. The rulemaking authority of the Commission and the authority of the General Assembly to review, delay or annul rules are nonseverable.
The Drinking Water Revolving Fund is created. The Safe Drinking Water Commission shall establish criteria for priorities for drinking water loans and shall develop an Intended Use Plan. At least 35% of grant funding shall be made available for qualifying systems serving 10,000 or fewer persons. Permitted public water systems must designate an organization to serve as the "continuing authority" for the system. After Oct. 1, 1999, new community and other nontransient water systems must show that they have and will maintain the resources and capability to comply with safe drinking water law. Any community or other nontransient water system subject to an administrative order for significant noncompliance with the federal Safe Drinking Water Act shall be required to designate a "continuing authority" and demonstrate the capability to comply with safe drinking water law.
The Department may allow testing under a federally-authorized "flexible monitoring program". Each water supplier shall provide each customer with the federally-required report of test results.
The Department may issue administrative orders pertaining to public water systems. Civil penalties may be sought for violations of orders and rules, as well as violations of law. The Department shall not seek a civil penalty if an administrative penalty was assessed and collected. The Department shall seek to resolve violations with conference, conciliation and persuasion.
DESCRIPTION (continued)
The act authorizes the SDWC to assess administrative penalties under requirements and procedures which are generally similar to those already provided in law for several other regulatory programs within the DNR. The maximum penalty is one thousand dollars per day for systems serving more than ten thousand persons and two hundred and fifty dollars per day for smaller systems. The maximum penalty per violation is twenty-five thousand dollars. Penalties may be appealed to the Commission and then to circuit court. Administrative penalties shall not be imposed if the violation only has "potential" to cause harm to health or the environment.
The Department may identify the origins of monitored drinking water contaminants. The Department may establish a voluntary, source water petition protection program.
Rules of the Clean Water Commission (CWC) shall be promulgated pursuant to Chapter 536, RSMo. Existing rules authority is repealed, but existing rules are not affected. Rulemaking authority of the CWC and the authority of the General Assembly to review, delay or annul rules are nonseverable.
The Department may provide assistance under Chapter 644, RSMo, to state agencies and community and nonprofit, noncommunity water systems. The Clean Water Commission shall establish priorities for wastewater projects and implement the Intended Use Plan for drinking water loans. The Water and Wastewater Loan Fund may also be used to provide assistance to community and nonprofit, noncommunity water systems and private wastewater facilities. Moneys in the Drinking Water State Revolving Fund shall be used for the purposes of the federal Safe Drinking Water Act and shall be accounted for separately.
A permit from an agency with appropriate jurisdiction over a flood prone area shall constitute conclusive proof of a "reasonable use" in any court case regarding a surface water project in a flood plain.
The Department of Natural resources shall certify "nationwide" wetland permits established by the United States Army Corps of Engineers under Section 404 of the federal Clean Water Act without conditions relating to wetlands.
The Clean Water Commission may adopt a rebuttable presumption that the portion of a stream extending upstream up to one mile from a designated losing stream is also a losing stream. The Commission may not adopt any other presumptions that streams are losing streams and shall base those determinations on actual information about the stream.
This legislation is federally mandated, would not duplicate any other program and would require additional capital improvements or rental space.
SOURCES OF INFORMATION
Department of Economic Development - Public Service Commission
Department of Health
Department of Natural Resources
Jeanne Jarrett, CPA
Director
January 14, 1998