1. (1) Authority: Title 73, Chapter 10c, Water Development Coordinating Council, and the SDWA Amendment of 1996 give the Board authority to provide emergency assistance to drinking water systems.

2. (2) Eligibility: Generally, any situation occurring as defined in Section R309-705-3 would qualify for consideration for emergency funding. However, before authorizing funds for an emergency, the Board may consider one or more of the factors in Subsection R309-705-9(2).

   1. (i) Was the emergency preventable? Did the water system have knowledge that this emergency could be expected? If not. Should it have been aware of the potential for this problem? Did its management take reasonable action to either prevent it or to be as financially and technically prepared as reasonably possible to correct the problem when it occurred?

      1. (ii) Has the water system established a capital improvement replacement reserve fund? Has the water system been charging reasonably high rates to establish a reserve fund to cover normal infrastructure replacement and emergencies?
      2. (iii) Is the community a disadvantaged community?
      3. (iv) While the state has no legal obligation to provide financial assistance, is the potential for illness, injury, or other harm to the public or system operators sufficiently high that the value of providing financial assistance outweighs other factors that would preclude providing this assistance.

3. (3) Requirements for the Applicant: The applicant will be required to do the following as a condition of receiving financial assistance to cope with a drinking water emergency:

   1. (i) To the extent feasible, the water system shall first use its own resources, such as a capital improvement replacement fund, to correct the problem.

      1. (ii) If the water system is not placing funds into a reserve fund on a regular basis or is charging relatively low water rates it shall be required to examine its current rate structure and policies for placing funds into a reserve account. The Board may require the water system to establish a reserve account or to revise its rate structure as a condition of the loan.
      2. (iii) The Board may place other requirements on the water system.

4. (4) Financial Agreements and Bonding. The State will work with the Applicant to help secure obligating documents. For example, the Board:

   1. (i) Could waive the 30-day notice period, if legally possible.

      1. (ii) Could accept a generic bond.
      2. (iii) Could accept an unsecured loan or bond.
5. (5) Funding Alternatives: An Applicant may be authorized to receive a loan by any of the financial assistance methods specified in Section R309-705-4 for funding an emergency project. The Board may set and revise the methodology and factors to be considered when determining the terms of any financial assistance it provides including assigning a priority it deems appropriate. The terms of the loan, including length of repayment period, interest or hardship grant assessment, and principal forgiveness or grant, or repayment waivers will be determined when the emergency funding is authorized.

6. (6) Funding Process - The Board must find that an emergency exists according to the criteria in Subsection R309-705-9(2). It is anticipated that under normal emergency conditions time restraints will not allow a request for emergency funding to be placed on the agenda of a regularly scheduled Board meeting or adoption and advertisement of a project priority list. Therefore, the following procedures will be followed in processing a loan application for emergency assistance:

   1. (i) Division staff will evaluate each application for emergency funding according to the criteria listed in Subsection R309-705-9(2). Staff will solicit recommendations from the LHD and District Engineer about the proposed project to mitigate the emergency. Staff will submit a report of its findings to the Board Chair or designee.

      1. (ii) The Board Chair or designee will arrange for a timely meeting of the Board to consider authorizing assistance for the emergency. This meeting may be conducted by telephone or virtual means using readily available computer platforms.

KEY: SDWA, financial assistance, loans

Date of Last Change: May 22, 2023

Notice of Continuation: February 10, 2025

Authorizing, and Implemented or Interpreted Law: 19-4-104; 73-10c