STATE OF GEORGIA DRINKING WATER STATE REVOLVING FUND PROGRAM STATE FISCAL YEAR 2014 ANNUAL REPORT Working together for Safe Drinking Water for all Georgians Prepared by the GEORGIA ENVIRONMENTAL FINANCE AUTHORITY For the U.S. ENVIRONMENTAL PROTECTION AGENCY, REGION IV September 30, 2014 PLEASE NOTE that this report does not constitute nor is it suitable for use as an official financial statement. This report was not prepared by an independent auditor or accountant, and is provided for informational purposes only. DRINKING WATER STATE REVOLVING FUND ANNUAL REPORT TABLE OF CONTENTS STATE FISCAL YEAR 2014 INTRODUCTION ............................................................................................................................................................ 1 EXECUTIVE SUMMARY .............................................................................................................................................. 1 ADDITIONAL SUBSIDIZATION PROJECTS............................................................................................................ 2 BLAIRSVILLE (DWSRF 12-009)...................................................................................................................................... 2 BUTTS COUNTY WATER & SEWER AUTHORITY (DWSRF 11-025) ................................................................................. 2 CLAXTON (DWSRF 13-010) ........................................................................................................................................... 2 DILLARD (DWSRF 10-003) ............................................................................................................................................ 3 ELBERTON (DWSRF 13-008).......................................................................................................................................... 3 HART COUNTY WATER AND SEWER AUTHORITY (DWSRF 11-002)............................................................................... 3 NICHOLSON WATER AUTHORITY (DWSRF 08-008) ....................................................................................................... 3 SINCLAIR WATER AUTHORITY (DWSRF 10-022) ........................................................................................................... 3 WALTHOURVILLE (DWSRF 11-003)............................................................................................................................... 3 WASHINGTON (DWSRF 09-026) .................................................................................................................................... 4 BASE DWSRF PROJECTS ............................................................................................................................................ 4 CALHOUN (DWSRF 13-003)........................................................................................................................................... 4 COVINGTON (DWSRF 13-006) ....................................................................................................................................... 4 DONALSONVILLE (DWSRF 11-014) ............................................................................................................................... 4 HARRIS COUNTY (DWSRF 111-013) .............................................................................................................................. 4 MONROE (DWSRF 13-007) ............................................................................................................................................ 5 POLK COUNTY WATER, SEWERAGE AND SOLID WASTE AUTHORITY (DWSRF 12-011) ................................................ 5 WAVERLY HALL (DWSRF 11-021) ................................................................................................................................ 5 MEETING IUP GOALS AND OBJECTIVES .............................................................................................................. 5 DWSRF LOAN DISBURSEMENTS .............................................................................................................................. 6 DWSRF STATE MATCH ............................................................................................................................................... 6 DWSRF LOAN REPAYMENTS .................................................................................................................................... 7 ASSURANCES AND SPECIFIC PROPOSALS ........................................................................................................... 7 DISADVANTAGE BUSINESS ENTERPRISE (DBE) PARTICIPATION ................................................................ 8 PROGRAM ADMINISTRATION (4 PERCENT) ........................................................................................................ 8 SMALL SYSTEM TECHNICAL ASSISTANCE (2 PERCENT)................................................................................ 9 ASSISTANCE TO STATE PROGRAMS (10 PERCENT) ........................................................................................ 10 PUBLIC WATER SYSTEM SUPERVISION OPERATOR TRAINING ...............................................................10 CROSS CONNECTION CONTROL .......................................................................................................................11 IMPLEMENTATION OF EPD'S CRYPTOSPORIDIUM STRATEGY ...............................................................12 CAPACITY DEVELOPMENT PROGRAM ............................................................................................................13 SOURCE WATER / GROUND WATER INVESTIGATIONS ...............................................................................14 INFORMATION MANAGEMENT.........................................................................................................................15 GEORGIA ASSOCIATION OF WATER PROFESSIONALS (GAWP)................................................................16 LOCAL ASSISTANCE AND OTHER STATE PROGRAMS (15 PERCENT) ....................................................... 16 CAPACITY DEVELOPMENT PROGRAM ............................................................................................................16 WELLHEAD PROTECTION ..................................................................................................................................17 GEORGIA RURAL WATER ASSOCIATION (GRWA) .........................................................................................17 GEORGIA WATER AND WASTEWATER INSTITUTE (GWWI) .......................................................................18 LIST OF ATTACHMENTS ATTACHMENT 1: SOURCES AND USES OF FUNDS BY QUARTER ..........................................................................................19 ATTACHMENT 2: DWSRF REPAYMENT ACCOUNTS ...........................................................................................................19 ATTACHMENT 3: COMMUNITIES RECEIVING DWSRF FINANCIAL ASSISTANCE .................................................................20 ATTACHMENT 4: BINDING COMMITMENTS BY CATEGORY, POPULATION & DOLLAR VALUE ............................................21 ATTACHMENT 5: DISBURSEMENT OF FUNDS BY QUARTER.................................................................................................22 ATTACHMENT 6: COMPARISON OF PROJECTED VERSUS ACTUAL DISBURSEMENTS ...........................................................23 ATTACHMENT 7: PROJECTS INITIATING OPERATION ..........................................................................................................24 ATTACHMENT 8: ADMINISTRATIVE & SET-ASIDE EXPENSES BY CATEGORY......................................................................25 ATTACHMENT 9: DBE UTILIZATION ..................................................................................................................................26 ATTACHMENT 10: DWSRF CAPITALIZATION GRANTS AVAILABLE & SPENT ....................................................................27 STATE OF GEORGIA DRINKING WATER STATE REVOLVING FUND PROGRAM STATE FISCAL YEAR 2014 ANNUAL REPORT INTRODUCTION The Drinking Water State Revolving Fund (DWSRF) program provides assistance to public water systems for capital improvement projects in Georgia in order to protect public health through regulatory compliance, to ensure water supply, and to promote the goals of the federal Safe Drinking Water Act of 1974, as amended. The 1996 Amendments to the Safe Drinking Water Act (SDWA) (Pub. L. 104-182) authorized the Administrator of the U.S. Environmental Protection Agency (EPA) to establish a DWSRF loan program to assist states in financing local public water system infrastructure needed to achieve or maintain compliance with SDWA requirements in order to protect public health. In accordance with the DWSRF Program Guidelines published by the EPA Office of Water (816-R-97-005) in February 1997, each capitalization grant recipient must submit at least a biennial report on the activities of the DWSRF Program. This state FY 2014 DWSRF Program Annual Report covers both the program and set-aside activities, and compares these activities to the activities proposed in the 2013 Intended Use Plan (IUP). The Georgia Environmental Finance Authority (GEFA) was created by the Georgia General Assembly in 1986 as the successor agency to the Georgia Development Authority Environmental Facilities Program. GEFA serves as the central state agency for assisting local governments in financing the construction, extension, rehabilitation and replacement and securitization of public works facilities. The Governor of Georgia appoints eight members to the GEFA board of directors and three ex-officio members are designated by the Authority's enabling legislation. The Georgia Environmental Protection Division (EPD) provides some professional services for the DWSRF Program. These services include: project reviews and approvals; planning; project development; information tracking; information gathering and development of the National Needs Survey; issuing Notices of No Significant Impacts (NONSI) and Categorical Exclusions (CE); assistance with the National Information Management System (NIMS) and administration of EPD's set-aside activities as well as certain sections of the Drinking Water Benefits reporting database. EXECUTIVE SUMMARY In May of 2013, GEFA submitted the 2013 grant application and IUP. The 2013 grant was awarded on September 11, 2013, for $19,899,000. Additionally, in March 2014 the 2014 grant application and IUP was submitted to EPA for $19,284,000 and was awarded on July 10, 2014. Funds received by Georgia's DWSRF Program from EPA through June 30, 2014 total $369,460,847. Georgia's required state match to date totals $65,886,080 for a grand total of $435,346,927. Attachment 1 displays the total sources of funds by quarter during state FY 2014 including federal grant funds, state match contributions, repayments from direct federal loans, repayments State FY 2014 DWSRF Annual Report 1 from state match loans, and interest earnings generated from these accounts. Attachment 1 also shows the closing fees collected by quarter. Attachment 2 displays the balances within these accounts as of June 30, 2014. The DWSRF Program executed eleven new assistance agreements and seven loan increases in state FY 2014 for a total of $29,657,680. This total assistance amount includes $26,795,090 in low-interest loans and $2,862,590 in principal forgiveness funds. Attachment 4 displays information about these projects in the format of the National Information Management System (NIMS). The DWSRF Program provided $9,055,133 of the $29,657,680 to small water systems servicing fewer than 10,000 residents while $3,861,646 was provided to small water systems servicing fewer than 3,300 residents. Lastly, GEFA and EPD have entered all necessary information into the Drinking Water Benefits reporting database for all projects funded through state FY 2014. All projects listed below were either on the Comprehensive List or Fundable List and are eligible public water systems. If the project was not the highest priority project at the time, it bypassed those higher priority projects according to the IUP bypass procedures. All commitments were made to qualified local governments or water and sewerage authorities according to the requirements of the Georgia Department of Community Affairs (DCA), and all possess a verified Service Delivery Strategy approved by DCA. Additionally, all loan recipients have the technical, managerial, and financial capability to operate a water system. Each project was also reviewed in accordance with the EPA-approved State Environmental Review Process (SERP), and was issued a NONSI or a CE. All DWSRF projects completed a 4700-4 Certification Form and subsequently had that form approved by EPA. Below is a short write-up for each of the projects funded in state FY 2014. ADDITIONAL SUBSIDIZATION PROJECTS Blairsville (DWSRF 12-009) On October 22, 2013, Blairsville signed a $1,693,000 assistance agreement including $423,250 in principal forgiveness to upgrade undersized and aging waterlines along Pat Haralson Memorial Drive and Deep South Farm Road for improved flow, pressure and reduced water leaks. The city also plans to replace 1,310 water meters with a wireless automatic smart reading system. As of the end of state FY 2014, Blairsville has drawn $550,583.05 of this commitment. Butts County Water & Sewer Authority (DWSRF 11-025) On March 27, 2014, Butts County Water & Sewer Authority signed a $1,722,000 assistance agreement including $420,000 in principal forgiveness to install a new 500,000-gallon elevated water storage tank. As of the end of state FY 2014, Butts County Water & Sewer Authority has not drawn any funds of this commitment. Claxton (DWSRF 13-010) On May 19, 2014, Claxton signed a $1,850,000 assistance agreement including $500,000 in principal forgiveness to improve the water distribution system by replacing water mains, adding loops, rehabilitating a water supply well, replacing water meters, making software State FY 2014 DWSRF Annual Report 2 upgrades, and replacing fire hydrants. As of the end of state FY 2014, Claxton has not drawn any funds of this commitment. Dillard (DWSRF 10-003) On January 27, 2014, Dillard signed a $75,000 assistance agreement increasing an existing $750,000 loan to install approximately 7,580 linear feet (LF) of 10-inch waterline, 2,800 LF of 8-inch waterline and 1,000 LF of 6-inch waterline which will extend along US 441 to GA 246. The city requested an additional $75,000 in principal forgiveness to cover the total project cost due to higher than expected bid prices. As of the end of state FY 2014, Dillard has drawn $550,917.23 of the total commitment. Elberton (DWSRF 13-008) On March 1, 2014, Elberton signed a $2,500,000 assistance agreement including $500,000 in principal forgiveness to complete water treatment plant renovations and make a connection to the city of Bowman's water system. This project will also replace water mains, add loops, extend water mains and replace water meters. As of the end of state FY 2014, Elberton has drawn $634,374.18 of this commitment. Hart County Water and Sewer Authority (DWSRF 11-002) On July 26, 2013, Hart County Water and Sewer Authority signed a $2,221,700 assistance agreement including $444,340 in principal forgiveness to install 35,960 linear feet of water lines, 2 booster pumping stations, a 500,000 gallon elevated water storage tank and related appurtenances. As of the end of state FY 2014, Hart County Water and Sewer Authority has drawn $824,754.45 of this commitment. Nicholson Water Authority (DWSRF 08-008) On July 11, 2013, the Nicholson Water Authority signed a $200,000 assistance agreement, increasing an existing $1,000,000 loan to make the following improvements to its water system: new wells and well rehabilitation, distribution improvements including water main replacement and adding loops, storage improvements such as removing the 75,000 gallon elevated storage tank, and miscellaneous improvements such as water meter replacement, meter reading software, training and new billing software. The authority requested an additional $200,000 to upgrade the existing SCADA system and to develop additional well sites to increase the water supply to the authority's service area. As of the end of state FY 2014, the Nicholson Water Authority has drawn $997,771.13 of the total commitment. Sinclair Water Authority (DWSRF 10-022) On August 10, 2013, the Sinclair Water Authority signed a $15,000 assistance agreement, increasing an existing $150,000 loan to install a new raw water pump and variable frequency drive at the existing raw water pump station. These upgrades will provide needed reliability and increase the efficiency of the pump station. The authority requested an additional $15,000 because bids came in higher than anticipated. As of the end of state FY 2014, Sinclair Water Authority has drawn all funds of the total commitment. Walthourville (DWSRF 11-003) On July 3, 2013, Walthourville signed a $117,900 assistance agreement, increasing an existing $627,100 loan to replace approximately 1,700 residential and 12 large old water State FY 2014 DWSRF Annual Report 3 meters with radio-read meters. The city requested an increase of $117,900 to purchase and connect two existing water systems to the city and install 87 new radio-read meters. This project will add 87 new customers to the Walthourville water system. As of the end of state FY 2014, Walthourville has drawn $622,184.68 of the total commitment. Washington (DWSRF 09-026) On July 11, 2013, Washington signed a $462,232 assistance agreement, increasing an existing $9,047,067 loan to increase the capacity of the Skull Shoals Water Treatment Plant and to rehabilitate the Aonia Water Treatment Plant. The city requested an increase of $462,232 to replace the high service water main from the Skull Shoals Water Treatment Plant to the city's distribution system. As of the end of state FY 2014, Washington has drawn $9,365,443.42 of the total commitment. BASE DWSRF PROJECTS Calhoun (DWSRF 13-003) On December 2, 2013, Calhoun signed a $6,943,847 assistance agreement to replace the flash mix system, refurbish concrete sedimentation basins, replace sludge collectors and settlers, and construct a high service pump station at the Mauldin Road Water Treatment Plant. Also included in the scope of work is the replacement of approximately ten miles of deteriorated galvanized distribution lines and construction of approximately 36,000 linear feet of water mains. As of the end of state FY 2014, Calhoun has drawn $621,284.65 of this commitment. Covington (DWSRF 13-006) On June 3, 2014, Covington signed a $4,500,000 assistance agreement to replace approximately 66,000 linear feet of deteriorating 2, 4 and 6-inch galvanized and asbestos cement mains with new 8-inch ductile iron pipe, fire hydrants, valves and appurtenances. As of the end of state FY 2014, Covington has not drawn any funds of this commitment. Donalsonville (DWSRF 11-014) On December 3, 2013, Donalsonville signed a $18,646 assistance agreement increasing an existing $307,000 loan to install radio read equipment on all water meters in the city and to purchase hardware and software to support the automatic meter reading process. As of the end of state FY 2014, Donalsonville has drawn all funds of the total commitment. Harris County (DWSRF 111-013) On June 24, 2014, Harris County signed a $2,000,000 assistance agreement to provide two additional treatment processes (flocculation and sedimentation) at the existing Harris County water plant. The water plant currently withdraws 3.0 million gallons per day (MGD), but only distributes 2.5 MGD due to the water lost during the current treatment process. These improvements will reduce water loss at the water plant and allow the plant to distribute 2.8 MGD of treated water. As of the end of state FY 2014, Harris County has not drawn any funds of this commitment. State FY 2014 DWSRF Annual Report 4 Monroe (DWSRF 13-007) On May 8, 2014, Monroe signed a $2,000,000 assistance agreement to replace approximately 7,000 water meters with automated meter reading technology. As of the end of state FY 2014, Monroe has not drawn any funds of this commitment. Polk County Water, Sewerage and Solid Waste Authority (DWSRF 12-011) On August 1, 2013, Polk County Water, Sewerage and Solid Waste Authority signed a $1,200,000 assistance agreement to rehabilitate the existing Deaton Springs spring water containment structure, located on the bank of Euharlee Creek. The purpose of this project is to preserve the existing supply of spring water that is currently lost to Euharlee Creek and to prevent the spring water from being fouled by silted waters from Euharlee Creek during flood events. As of the end of state FY 2014, Polk County Water, Sewerage and Solid Waste Authority has drawn $439,152.03 of this commitment. Waverly Hall (DWSRF 11-021) On December 2, 2013, Waverly Hall signed a $25,000 assistance agreement increasing an existing $360,000 loan to rehabilitate two existing wells, replace existing small galvanized water lines, connect to the Harris County water system for supplemental supply, clean and repaint both storage tanks, and install telemetry for well pump control. The town of Waverly Hall requested an increase of $25,000 to cover the total project cost due to higher than expected bid prices. As of the end of state FY 2014, Waverly Hall has drawn $365,665.15 of the total commitment MEETING IUP GOALS AND OBJECTIVES The 2013 DWSRF IUP listed three goals of the program. The first goal listed in the 2013 IUP was: The DWSRF Program will support the implementation of water conservation initiatives to help protect the state's water supply resources. The GEFA board of directors passed a 1 percent interest rate reduction on all water conservation projects funded through the DWSRF Program. GEFA hopes to market this additional interest rate incentive across the state in an effort to further this initiative. Status: GEFA has continued to promote this water conservation initiative to potential borrowers. In FY 2014, six of the projects listed in Attachment 3 contained some water conservation benefit. The GEFA board of directors took this initiative one step further in January 2014 and launched a global Conservation initiative which lowered the stated interest rate by 1% for any water, energy or land conservation project. This initiative will not only fund water conservation projects, but will also fund energy conservation projects like solar projects at water treatment facilities and projects that reduce energy consumption within the water utility. The second goal listed in the 2013 IUP was: In order to reduce the unliquidated obligations (ULO) within the DWSRF Program, GEFA will identify strategies to increase the use of DWSRF set-aside funds as well as increase the State FY 2014 DWSRF Annual Report 5 disbursement rate within the project accounts. The DWSRF Program will continue working with EPA to transfer DWSRF funds from the 2011 DWSRF grant to the 2011 CWSRF grant in order to reduce DWSRF ULO's and better handle the high demand in the Clean Water State Revolving Fund (CWSRF) Program. Status: GEFA has worked tirelessly is reduce the ULOs within the DWSRF Program. GEFA's increased spending of the set-aside accounts has resulted in the closure of the 2010 and 2011 DWSRF grants. GEFA is working toward EPA's requirement to have only two grants open at one time and with the increase in project and set-aside spending, this goal should be met by the deadline prescribed by EPA. Because of the increased spending in the DWSRF, the 2011 transfer from the DWSRF Program to the CWSRF Program was not needed. The third goal listed in the 2013 IUP was: As a result of the Georgia Water Stewardship Act of 2010, the Georgia state legislature required all water systems serving over 3,300 in population to perform a water loss audit. In 2013, GEFA will continue with phase II of this work and begin to provide water loss abatement technical assistance to those small water systems that performed the water loss audit and submitted the audit to EPD by the March 1, 2013, deadline. This water loss abatement technical assistance will be funded from the 2 percent Small System Technical Assistance set-aside. Status: GEFA has seen tremendous success with its water loss abatement training and technical assistance program since the passage of the Water Stewardship Act of 2010. In FY 2014, GEFA funded water loss abatement projects in 52 small water systems throughout the state including finished water meter flow verification, customer meter testing and pilot leak detection. More specifics about this program are provided in the 2% Small System Technical Assistance section of the annual report. DWSRF LOAN DISBURSEMENTS The DWSRF Program disbursed funds to 39 active projects during state FY 2014. Attachment 5 shows the projects which received funds by quarter in state FY 2014. The DWSRF Program disbursed a total of $22,962,991.63 in state FY 2014. Many of these projects received a mix of additional subsidization, base DWSRF funds and state match funds. Attachment 6 compares the projected disbursement schedules indicated within the 2011, 2012 and 2013 IUPs for state FY 2014 against the actual disbursements made in state FY 2014. The DWSRF Program disbursed 99 percent of what it projected it would disburse in state FY 2014. DWSRF STATE MATCH During state FY 2014, all projects which received federal capitalization grant dollars were funded with 77.53 percent federal dollars and 22.47 percent state match dollars. GEFA has revisited this state match process and is currently considering implementing a new process whereby State FY 2014 DWSRF Annual Report 6 state match funds are disbursed before federal funds. With the implementation of a new loan servicing software, this new approach will closely align with EPA's suggested methodology. GEFA received sufficient general obligation bond funds from the state to match the DWSRF program at 20 percent. These bond funds were deposited into the same DWSRF fund in which grant payments are made. Attachment 1 shows the amount of state match funds provided during state FY 2014 by quarter. DWSRF LOAN REPAYMENTS In state FY 2014, sixteen projects initiated operation under the DWSRF Program from a total of $20,594,390 in commitments (Attachment 7). The total dollar value disbursed to these sixteen projects initiating operation within state FY 2014 was $20,398,359.43 which equates to 99 percent of the contracted amount. All of the sixteen projects completed the construction phase and entered into the repayment phase of the DWSRF loan process. To maintain the revolving nature of the DWSRF fund, all repayments including the principal and interest and fees are credited to the DWSRF Program. The total amount of repayments credited to the DWSRF fund from federal and state match projects along with the interest earnings from these accounts can be seen in Attachment 1. ASSURANCES AND SPECIFIC PROPOSALS The DWSRF Program adheres to all the certifications covered in The SDWA as well as those within Georgia's Operating Agreement with the Regional EPA office. The specific certifications are: A. Introduction and General Program Management Assurances B. DWSRF-An Instrumentality of the State 1. State Law 2. Interagency Agreements C. Capitalization Grant D. Payment Schedule E. State Matching Funds F. Commitment of 120 percent in One Year G. All Funds - Timely Expenditure H. Enforceable Requirements of the Act I. Cross Cutting Issues J. State Law and Procedures K. State Accounting and Auditing Procedures L. Recipient Accounting and Auditing Procedures M. Annual Report N. Limitations on Eligibility O. Environmental Review/NEPA-like Process P. Maintain the Fund Q. Perpetuity R. Types of Assistance State FY 2014 DWSRF Annual Report 7 S. Priority List T. Annual Audit U. Annual Federal Oversight Review and Technical Assistance V. Dispute Resolution A copy of the state FY 2014 audited financial is provided under separate cover. DISADVANTAGE BUSINESS ENTERPRISE (DBE) PARTICIPATION As a part of GEFA's loan agreement, all loan recipients are required to encourage the participation of small, minority and women owned businesses in all project subcontracts. The state's DWSRF Program percentage goal through September 30, 2016, is 4.0 percent for Minority Business Enterprises (MBE) and 4.0 percent for Women Business Enterprises (WBE). A summary of the DBE utilization is displayed in Attachment 9. Due to the reporting change of the DBE numbers to EPA from semi-annually reporting to annual reporting, the data provided in Attachment 9 is for the reporting period of October 1, 2012 September 30, 2013. GEFA staff has made a tremendous effort to comply with the EPA's Six Good Faith Efforts. Telephone calls and emails are regularly made to DBE subcontractors to encourage their participation in both the Clean Water and Drinking Water SRF programs. DBE's are alerted to GEFA's approved projects as soon as they appear in our database, allowing subcontractors to inquire and prepare for these projects prior to the bid date. Subcontractors are additionally urged to pursue Environmental Protection Agency / Department of Transportation / Small Business Administration certification. GEFA staff has made themselves available to answer questions and assist subcontractors in the application process. GEFA also maintains an in-house bidder's list of certified DBE prime and subcontractors. The data for the bidders list is collected and forwarded to loan recipients with compliance approval. The bidder list also serves as a database of MBE and WBE and non-MBE/WBE prime and subcontractors. In considering whether firms could subcontract with DBEs, GEFA encourages prime contractors to follow the Six Good Faith Efforts to solicit the services of minority and women-owned businesses, and will withhold approval for a project if there is insufficient documentation that the efforts were met. Prime contractors are also provided with an example of an EPA-approved newspaper advertisement, and an example of a solicitation letter in efforts to eliminate generic newspaper advertisements and poorly-written letters. Prime contractors are a link for the available DBEs on the Georgia DOT website and the Bidders list are also available to prime contractors, as well as the names, addresses and telephone numbers of contacts in the SBA, the Minority Business Development Agency, the Department of Commerce and other related agencies and associations throughout the state. Guidance is also provided in all related construction contracts to encourage prime contractors to divide work when feasible. PROGRAM ADMINISTRATION (4 PERCENT) In state FY 2014, GEFA and EPD spent $1,095,834.62 on program administration. Administrative and programmatic services provided by EPD include: project reviews; planning; State FY 2014 DWSRF Annual Report 8 reviewing and uploading needs surveys; and issuing NONSIs and CEs (Attachment 8). During state FY 2014, the Construction Management Unit (CMU) processed 169 DWSRF project draw requests and completed 324 DWSRF inspections. EPD's Construction Management Unit was transferred to the GEFA Water Resources Division effective February 2014. This transfer will allow GEFA's program managers and construction managers to foster a closer working relationship resulting in more effective management of the DWSRF program. SMALL SYSTEM TECHNICAL ASSISTANCE (2 PERCENT) During state FY 2014, Georgia spent $295,350 via a contract with the Georgia Rural Water Association (GWRA) to provide "circuit rider" type technical activities including technical and managerial assistance and Synthetic Organic Compound (SOC) sampling. Under the provisions of this contract, GWRA is required to provide up to 10 percent of the visits within 48 hours of notification by EPD in order to quickly address problems posing an immediate threat to public health. The visits made by the GRWA technicians fall into the following broad categories: actual compliance, potential compliance, water conservation, managerial, finance, operational maintenance, and water treatment. The variety of technical assistance provided by the circuit-rider technicians includes, but is not limited to, rate studies, water audits and leak detection surveys, pipe and valve location services, infrastructure assessments, source water protection, operation and maintenance programs, on-site operational assistance, troubleshooting and problem-solving, fluoridation equipment evaluations and inspections, and the identification of financing alternatives. For the contract period from July 1, 2013 to June 30, 2014, a total of 500 face-to-face contact visits were made to systems requiring technical assistance. This contract also requires GRWA to perform SOC sampling for public water systems throughout the state on a scheduled basis. During state FY 2014, 415 visits were made in order to collect and submit the required SOC samples to the EPD laboratory. In state FY 2014, GEFA continued its efforts in small water system water loss abatement. GEFA provided technical assistance to 52 small water systems throughout the state. GEFA hired Cavanaugh and Associates to provide program management services to manage the interactions between these 52 projects and the six contractors hired to provide the technical assistance. The technical assistance consisted of 17 small water systems receiving finished water meter flow verification on 28 finished water meters, 12 small water systems receiving customer meter testing on 147 large customer meters and 23 small water systems each receiving 30 miles of pilot leak detection services. A small water system in this effort is defined as those systems servicing between 3,300 and 10,000 customers. GEFA spent $482,822.66 on this technical assistance water loss abatement program. This program was so successful, GEFA recently launched a continuation of the program in FY 2015. State FY 2014 DWSRF Annual Report 9 ASSISTANCE TO STATE PROGRAMS (10 PERCENT) States are allowed to use up to 10 percent of its capitalization grant to provide funding for certain activities that provide "Assistance to State Programs." These activities include: administration of the Public Water System Supervision Program (PWSS); administration and provision of technical assistance through source water assessment programs; implementation of capacity development strategy; cross-connection control device tester certification program and water conservation and efficiency and continued state wide water planning; and, implementation of EPD's Cryptosporidium Strategy. The following is a summary of activities funded under the 10 percent set-aside to assist in the implementation of the requirements of the federal Safe Drinking Water Act (SDWA). PUBLIC WATER SYSTEM SUPERVISION OPERATOR TRAINING The State of Georgia obtained EPA approval for its operator certification program on May 1, 2001, in compliance with Section 1419 of the SDWA, as amended. Under this program, Georgia must prepare an annual report in accordance with the requirements of the "Final Additions to the Final Guidelines for the Certification and Recertification of the Operators of Community and Nontransient Non-community Public Water Systems." This document was published in the Federal Register on April 18, 2001, and was submitted to EPA to demonstrate that the State of Georgia is adequately implementing its operator certification program. In addition, Section 1419(b) of the SDWA requires the EPA to withhold 20 percent of funds that a State is otherwise entitled to receive under Section 1452 of the SDWA unless a State has adopted and is implementing a program that meets the requirements of EPA's operator certification guidelines. Georgia's operator certification program was revised to include an exam for Class IV Water Operators in accordance with federal guidelines. The exam requirement for prospective Class IV Water Operators helps to ensure that these licensed operators will have the required knowledge and ability to successfully operate and maintain groundwater systems that serve populations of 25 to 999 people. The exams for all operator classification levels are developed and validated by the Association of Boards of Certification. In its capacity development strategy program, the EPD has utilized many resources and has placed a very high priority on operator training and certification. EPD realizes the importance of experienced, certified operators having the necessary knowledge and dedication to properly operate and maintain a public water system. The following table and graph provides the number of certified operators by classification level for the reporting period 2004 - 2014. The data is also used to establish a baseline for EPD to measure progress in operator training and certification. State FY 2014 DWSRF Annual Report 10 Table 1. Certified operators licensed in Georgia by year and classification level Year Operator License 2004 2005 Class I 672 723 Class II 359 364 Class III 977 1015 Class IV 872 932 Distribution 805 923 Laboratory 454 482 Total 4139 4439 2006 744 386 971 922 1132 515 4670 2007 729 391 925 817 1190 494 4546 2008 750 442 984 913 1330 592 5011 2009 741 427 929 794 1304 507 4702 2010 770 453 971 878 1407 524 5003 2011 746 444 903 743 1332 508 4676 2012 761 447 957 798 1400 517 4880 2013 786 472 985 844 1503 535 5125 2014 762 455 946 756 1477 520 4916 1600 Figure 1. Certified operators licensed in Georgia by year and classification level. 2004 1400 2005 1200 1000 800 2006 2007 2008 2009 600 2010 400 200 0 Class I Class II Class III Class IV Distribution Laboratory 2011 2012 2013 2014 CROSS CONNECTION CONTROL Activities under Cross Connection Control include coordination with the Georgia Association of Water Professionals (GAWP) for the purpose of establishing a State certification and re-certification program for backflow assembly testers using the American Backflow Prevention Association's nationally recognized certification program. EPD has implemented a requirement that any public water system must exclusively use backflow prevention assembly testers that currently hold a valid certification from a tester certification program recognized by the EPD to test backflow prevention devices connected to the State FY 2014 DWSRF Annual Report 11 public water system. GAWP has worked under contract to assist EPD in establishing this Statewide Backflow-Prevention Tester Certification Program. GAWP has been designated by EPD to administer a certification program utilizing exams provided by the Association of Boards of Certification. In addition, the American Backflow Prevention Association, the American Society of Sanitary Engineering, and the University of Florida/TREEO Center have been approved as official certification programs and are authorized to provide certification exams to GAWP to be used in this process. Approximately 1,300 backflow prevention professionals have been certified since the beginning of the program. IMPLEMENTATION OF EPD'S CRYPTOSPORIDIUM STRATEGY During state FY 2014, EPD utilized 10 percent set-aside funding to continue the implementation of its Cryptosporidium Strategy program, including the following activities: 1. Continued implementation of the federal Surface Water Treatment Rule (SWTR); 2. Implementation activities associated with the Interim Enhanced Surface Water Treatment Rule (IESWTR) and the Stage 1, Disinfectant/ Disinfection By-Products Rule (Stage 1 D/DBPR) for surface water systems serving over 10,000 persons; 3. Activities required under the Long-Term 1 Enhanced Surface Water Treatment Rule (LT1ESWTR) for surface water systems serving less than 10,000 persons and the Stage 1 D/DBPR for the remainder of surface water systems that serve less than 10,000 people and all groundwater systems; and, 4. Activities required under the Long-Term 2 Enhanced Surface Water Treatment Rule (LT2ESWTR) for all surface water systems and the Stage 2 D/DBPR for all surface and all groundwater systems. During this reporting period, EPD continued to perform source water monitoring at the surface water supply intakes for Cryptosporidium, E. coli and turbidity, as required by early implementation requirements of the LT2ESWTR. The Cryptosporidium monitoring is conducted monthly for twenty-four consecutive months. At the end of the monitoring period, EPD determines whether any of the systems will be required to perform additional treatment to inactivate and/or remove existing pathogens based on the Cryptosporidium concentration of the source water (bin classification). The last systems to commence this monitoring initiated their first round of monitoring in January 2010. Twenty-seven (27) Subpart H surface water systems began their second round of monitoring in July 2011. Thirty (30) Subpart H surface water systems were scheduled to begin their second round of monitoring on October 1, 2013. Another thirty (30) Subpart H surface water systems are scheduled to begin their next round of monitoring on October 1, 2015. Other important aspects of EPD's Cryptosporidium Strategy include conducting sanitary surveys, conducting system inspections and providing on-site technical assistance. EPD regularly conducts scheduled sanitary surveys for all public water systems in Georgia. The principal purpose of these sanitary surveys is to identify and resolve problems that may potentially pose a threat to public health. The sanitary surveys address eight components required by the EPA including the following: water source, treatment, distribution system, finished water storage, pumps, pump State FY 2014 DWSRF Annual Report 12 facilities and controls, monitoring and reporting and data verification, system management and operation, and operator compliance with state requirements. The sanitary survey report provides official, written documentation to water system officials outlining the improvements that need to be made to their system in order to protect public health and to improve the overall capacity of the water system. CAPACITY DEVELOPMENT PROGRAM During State FY 2014, EPD utilized funds from the 10 percent set-aside for activities associated with the implementation of Georgia's capacity development strategy, which was approved by EPA on September 21, 2000. As an important part of Georgia's capacity development strategy, EPD continues to require all new community and non-transient non-community public water systems, as well as those undergoing ownership changes, to develop a business plan in order to demonstrate adequate managerial and financial capacity. The business plan, in most cases, is required prior to issuance of the initial permit to operate or prior to the transfer of the existing operating permit. As of June 30, 2014, a total of 843 business plans have been submitted to EPD. During State FY 2014, 34 business plans were received from 15 new public water systems and 19 existing water systems. In addition to this requirement, all surface water and Ground Water Under Direct Influence (GWUDI) treatment plants are required to develop Operation & Maintenance Plans (O&M Plans), in accordance with the latest edition of the Division's "Guidance Manual for Preparing Public Water Supply O&M Plans." The O&M Plan is required prior to the start-up and permitting of a new surface water plant or GWUDI treatment plant. In addition, if not already on file with EPD, existing surface water and GWUDI systems are required to prepare an O&M Plan within the compliance schedule established for this deficiency in the sanitary survey. Groundwater systems with significant violations must develop business plans and/or O&M Plans, as required by EPD. These actions are intended to help both new and existing systems to stay in compliance with existing and future regulations. As of June 30, 2014, a total of 69 surface water or GWUDI systems have submitted detailed O&M Plans. EPD continues to utilize informal and formal enforcement actions, such as written Notices of Violations (NOVs), Consent Orders and Administrative Orders to promote compliance with federal and state drinking water regulations. Enforcement is an important tool in dealing with public water systems that lack adequate capacity. EPD's stringent enforcement program has been a significant factor in encouraging private public water systems with limited capacity to physically merge or consolidate with local governmentally owned water systems or water authorities. Figure 2 below shows the number of consolidations for public water systems in Georgia. State FY 2014 DWSRF Annual Report 13 # Consolidations Figure 2. Consolidations with governmentally owned water systems or water authorities 80 60 50 48 40 40 28 29 31 30 23 22 21 22 24 20 11 12 553 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Fiscal Year The continued use of negotiated settlements in the form of Consent Orders seems to be the most effective enforcement mechanism, rather than mandatory fines or civil penalties. Consent Orders allow EPD the flexibility to set appropriate penalties based upon the level of deficiencies and the negotiated plan to correct individual system violations in a timely manner. Figure 3 provides the number of enforcement orders issued for violations of the SDWA and/or the permit to operate a public water system. # Enforcement Orders Figure 3. Enforcement Orders for public water systems 160 120 112 99 104 91 80 79 83 76 77 80 83 80 62 69 35 40 28 43 36 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Fiscal Year SOURCE WATER / GROUND WATER INVESTIGATIONS During State FY 2014, EPD performed activities associated with the implementation of Georgia's Source Water Assessment and Protection Plan. Funds utilized under this category support salary, travel, professional development and associated miscellaneous expenses for two positions: one Geographic Information Systems (GIS) Specialist 3 and one Environmental Specialist 3. The GIS Specialist 3 administered the GIS Public Water System (PWS) database. This included coordinating updates to PWS withdrawal sources: surface water intakes, wells, and springs. Also included were updates to and QA/QC reviews of water-supply watersheds for PWS sources and associated Source Water Assessment Plan (SWAP) management zones. Information from the Wellhead Protection Program (WHPP) was also incorporated into this database consisting of: spatial and tabular data derived from WHPP plans, karst PWS source delineations, and potential pollution sources. The GIS Specialist 3 also coordinated GIS tasks for Regional Water Planning State FY 2014 DWSRF Annual Report 14 activities and the ongoing drought. This included both spatial analysis and cartographic production in support of the EPD Director's Office and various programs within the Watershed Protection Branch. For privately owned groundwater systems, SWAPs are being completed by the Environmental Specialist 3 as well as other in-house staff. To date, approximately 2,538 source water assessments have been prepared from July 1, 2001 through June 30, 2014. During State FY 2014, 13 SWAPs were completed for privately owned community ground water systems. This activity for the privately owned ground water systems will continue in the future. SWAPs are one way EPD helps to ensure safe drinking water for not only large but small governmentally- and privately-owned public water systems around the state. INFORMATION MANAGEMENT During the period from July 1, 2013 to June 30, 2014, EPD utilized the 10 percent set-aside for activities associated with information management. An information management pilot project was created to improve the tracking and reporting of public water system data, automate sample scheduling for public water systems, and automate compliance determinations. This program has enabled EPD to improve the accuracy of its data, which has led to improved compliance by the water systems. EPD's Data Management Specialist assists in migration of laboratory data into the Division's SDWIS/State information management system. During most of the current reporting period, this position has been vacant. The EPD Drinking Water Program has collaborated with EPA Region 4, EPA Contractor (SAIC), and the DNR IT Department to upgrade the current version of SDWIS/State (version 8) to the new web-release version SDWIS/State version 3.01 and then, version 3.2. One of the new features of SDWIS/State is the ability to view online much of the inventory, monitoring, sampling, and enforcement information about any water system. Called the Drinking Water Watch, water system owners and operators, along with their customers, can view information at their fingertips by going to http://gadrinkingwater.net. EPD staff continues to work to utilize all aspects of the program, including sample scheduling, automated compliance determinations, and enforcement actions. EPD continues to use the web-based surface water treatment plant monthly operating reporting system developed for data management. The project allows the surface water systems to enter their own data and EPD determines compliance based upon the official data submitted by the ORC. A groundwater version of the web-based monthly operating reporting system may be developed in the future to accommodate the new requirements of the Groundwater Rule (GWR) that went into effect in December 2009, as well as recent water conservation legislation in Georgia. State FY 2014 DWSRF Annual Report 15 GEORGIA ASSOCIATION OF WATER PROFESSIONALS (GAWP) Georgia Association of Water Professional's (GAWP) Drinking Water System Capacity Development Support Program continues to field technical support requests for expertise advice and training. During this reporting period, GAWP sent out numerous communication pieces (i.e. special advisories, utility notices, and regulatory updates) directly relevant to the regulated drinking water systems of Georgia. GAWP has an extensive electronic database that is available to the Georgia EPD for dissemination of critical information to Georgia's drinking water systems. Under this contract, GAWP conducted numerous conferences and workshops focused on providing training and continuing education opportunities for professionals in the water industry. In addition, GAWP also conducted planning sessions for small, medium, and large utility Directors, as well as District Director meetings to better address needs of the profession around the State. LOCAL ASSISTANCE AND OTHER STATE PROGRAMS (15 PERCENT) States may provide assistance, including technical and financial assistance, to public water systems as part of a capacity development strategy under Section 1420 (c) of the Act. States may also use the 15 percent set-aside to support the establishment and implementation of wellhead protection programs. The following provides a summary of the activities funded under the 15 percent set-aside category. CAPACITY DEVELOPMENT PROGRAM EPD performed inspections and provided on-site technical assistance and training for public water systems. The on-site visits included, but were not limited to the following: water treatment plant site visits, operator training, emergency assistance, laboratory inspections, unscheduled system inspections, on-site technical assistance, special sample collections, complaint investigations, construction inspections, record reviews, source water inspections, location specific data collection, cross-connection inspections or investigations, watershed evaluations, and public hearings. On-site technical assistance is very beneficial since most drinking water violations result from water system owner/operator's failure to understand the complex monitoring regulations and failure to perform the required testing and reporting. EPD continues to target public water systems with poor compliance records and to visit these systems on a more frequent basis than those not exhibiting compliance issues or reporting problems. During state FY 2014, EPD conducted a total of 641 sanitary surveys and performed a total of 562 on-site inspections of other types. EPD's Drinking Water Program (DWP) conducted a total of 56 sanitary surveys and performed 287 on-site inspections of public water systems treating surface water or groundwater under the direct influence of surface water. EPD's District Offices conducted a total of 585 sanitary surveys and performed 275 on-site inspections of public water systems using groundwater. In addition, EPD personnel provided on-site technical assistance to 1,203 water system owners and operators and responded to 132 citizen complaints. State FY 2014 DWSRF Annual Report 16 The engineers in the DWP and EPD District Offices continue to review and approve engineering plans and specifications and conduct inspections of public water systems, including those under construction, to ensure adequate technical capacity. During the period July 1, 2013 to June 20, 2014 there were 976 water system projects for both new and expanding public water systems reviewed and approved under EPD's regulatory authority, which includes the delegated authority. The approved projects included, but were not limited to, the design and construction of new water source facilities (intakes, wells, and purchased water connections), water treatment plants (surface water and ground water facilities), finished water storage tanks, pumping facilities, water plant sludge/waste handling and disposal facilities, and water main additions and extensions to existing water distribution systems. EPD environmental engineers also conducted inspections of public water systems, including those under construction, to help ensure these systems have adequate technical capacity. WELLHEAD PROTECTION During State FY 2014, wellhead protection plans continued to be updated for cities, counties, and water authorities when the permit to operate a public water system came up for renewal. Also, new wellhead evaluations were completed for proposed wells to identify potential sources of contamination and any deficiencies in locating the proposed source of supply. During State FY 2014, a total of 32 wellhead protection plans and 18 new wellhead evaluations were completed by EPD staff. DWSRF-funded associates continued to support the State Geologist and statewide water planning efforts by reviewing and updating drilling plans and estimates for an extensive well program proposed by the State to define critical aquifer conditions including capacity and reserves. Another geologist in the Watershed Protection Branch identified existing wells for sampling, obtained ground water samples for analyses, evaluated ground water quality and documented results in reports. Other geologic personnel assisted the Drinking Water Program by evaluating permit applications and ensuring that new system locations comply with wellhead protection regulations. GEORGIA RURAL WATER ASSOCIATION (GRWA) During State FY 2014, EPD used the 15 percent set-aside funds to contract with GRWA for operator training. GRWA conducted workshops to small groundwater system owners and operators under the "Groundwater System Training and Technical Assistance Contract" in order to help them comply with the disinfection by-products rules and Ground Water Rule. Under this contract, GRWA conducted a total of 16 workshops and trained approximately 553 water system owners and operators on new regulatory issues applicable to ground water systems. State FY 2014 DWSRF Annual Report 17 As part of their technical assistance, education and outreach efforts, GRWA also offers two educational conferences in Helen and Jekyll Island each year. During the past three years, over 4,308 water and wastewater personnel and laboratory analysts attended these events. During the period from July 1, 2013 to June 30, 2014, GRWA provided a total of 176 Water classes to a total of 1,783 individuals on the following topics: Class IV Operator Training, Basic Water Training, Advanced Water Training, Backflow Training, Water Distribution Training, Water Lab Training, Water Exam Review Training, Fluoride Training, Management Training and Basic Mathematics used in water system operation. GEORGIA WATER AND WASTEWATER INSTITUTE (GWWI) Georgia EPD maintained a contract with the Georgia Water and Wastewater Institute (GWWI) to train water treatment system operators on the technical aspects of treatment systems and to provide continuing education of these operators on a number of public health related areas. GWWI was incorporated in 1993 and today provides the majority of water and wastewater training in the State of Georgia, operating with financial assistance provided through contracts with EPD and modest tuition fees. GWWI goes beyond the traditional classroom-type training in their efforts to meet the needs of water system operators in the State of Georgia. GWWI also hosted a display booth at the annual GAWP conference explaining and advertising the training opportunities offered. In addition, the GAWP conducted planning sessions for utility directors of small, medium and large drinking water systems, as well as hosting association-wide District Director Meetings in an effort to better address the needs of the profession throughout Georgia. At these planning meetings, GWWI not only fosters awareness of training programs and offerings, but also serves as a valuable resource to the utility staff members as they plan to meet future system needs and requirements. This effort has proven to be a highly effective tool for both the utilities as well as for GWWI in ensuring that the operators receive the level and quality of training that is needed and required of system owners and staff. During the reporting period from July 1, 2013 to June 30, 2014, GWWI conducted a total of 88 courses related to water, wastewater and/or laboratory operations and successfully trained 1,179 operators. In the training sessions and workshops that were conducted at the annual, fall, and spring conferences during the past FY 2014, GWWI's Technical Assistance, Education and Outreach efforts reached over 2,503 water and wastewater treatment plant operators, maintenance personnel, laboratory analyst, design engineers, consultants, and other professionals concerned about Georgia water and wastewater issues. Training topics included sessions on traditional issues such as water and wastewater treatment plant operations, maintenance and design, rules and regulations, laboratory operations, security and safety, as well as timely discussions on policy issues such as drought contingency planning, wastewater re-use, and legislative policy. State FY 2014 DWSRF Annual Report 18 State FY 2014 DWSRF Annual Report 19 State FY 2014 DWSRF Annual Report 20 State FY 2014 DWSRF Annual Report 21 State FY 2014 DWSRF Annual Report 22 State FY 2014 DWSRF Annual Report 23 State FY 2014 DWSRF Annual Report 24 State FY 2014 DWSRF Annual Report 25 State FY 2014 DWSRF Annual Report 26 State FY 2014 DWSRF Annual Report 27