Drinking Water Revolving Fund
Purpose: Environmental Review

Introduction and background

The purpose of an environmental review is to ensure that projects do not create unwarranted, negative environmental impacts. This is accomplished through a process of assessment, public notification and documentation. In addition, an environmental review helps ensure projects do not violate federal or state environmental laws. The drinking water revolving fund environmental review procedures were designed to be as simple as possible, while still meeting federal and state requirements.

The U.S. Environmental Protection Agency requires an environmental review be completed before any project receives a drinking water revolving fund loan. The review process must be in compliance with the National Environmental Policy Act of 1969, as amended (Pub.L. 91-190, 42 U.S.C.4321 et seq.).

There are also State of Minnesota environmental review requirements. They are found in the Environmental Quality Board Rules, Chapter 4410. Although these rules will rarely if ever directly apply to a drinking water revolving fund environmental review process, the process cannot be in conflict with them.

The community or entity responsible for the water supply project will be responsible for gathering information, providing public notification, and assembling an environmental review record. A consultant can be hired to do the work, but this is not necessary. The Minnesota Department of Health (MDH) will examine the environmental review record and reach a conclusion about a project's environmental impact, which in turn will determine if the project can be funded.

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General information for all projects

Federal requirements demand the environmental review cover all parts of a project, even those parts not being financed by the revolving fund or other federally connected funding. For example, a project might consist of installing a new well and treatment plant and then connecting it to a community's distribution system via a transmission water main that extends through an environmentally sensitive area. The community would not be able to avoid doing an environmental review for the environmentally sensitive area by limiting revolving fund financing to only the well and treatment plant and using local funding for the transmission water main. The whole project, including the transmission line would be subject to environmental review.

Environmental review requirements differ among funding agencies. Find out each agency's expectations if more than one agency will be providing grants or loans for a project. For example, one agency may be providing a partial grant while another agency covers remaining costs with a loan. A second example would be where Agency 1 provides a loan for sewer lines and Agency 2 provides a loan for waterlines in a combined project. Utilize an environmental review process that will satisfy all agencies.

There are two other points to consider when conducting an environmental review: timing and total scope. An environmental review takes several months to complete, so start early enough to avoid delaying project funding. Also, environmental review conclusions remain valid for five years so, for efficiency, current and potential future projects can be included in one environmental review. A word of caution, however. If an environmental review is done early and project scope, design, or location change significantly, the environmental review might have to be redone.

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Project categories

There are five environmental review categories for public water system projects. Each category will determine what steps must be followed. It is possible, but not likely, that a project will be moved from one category to another during the environmental review process.

The instructions only pertain to the first three categories listed below, and they primarily focus on category 3, where most projects will be located. It is highly unlikely a drinking water project will be in category 4 or 5. Contact the Community Public Water Supply staff in your county if this does happen.

• Drinking Water Protection Contacts

The categories and criteria are:

1. Projects subject to another agency's environmental review.
2. Projects that are Exempt.
   1. Activities will be limited to:
      1. Environmental studies.
      2. Planning and design.
      3. Emergency/disaster relief and/or protection.
      4. Equipment installation.
      5. Water main in road right-of-way.
3. Projects that require an environmental analysis followed by a department of health summary of findings. (These are activities that will likely have little or no environmental impact.)
4. Projects that require an Environmental Assessment.
   1. Determining factors are:
      1. If mandated by Minnesota Environmental Quality Board Rules, 4410.1000 and 4410.4300 (A project would rarely be mandated).
      2. If the MDH determines an Environmental Summary process does is not provide sufficient analysis.
      3. If 25 or more people petition the Minnesota Environmental Quality Board.
      4. It is a necessary preliminary step when an environmental impact statement is required.
5. Projects that require an Environmental Impact Statement.
   1. Determining factors are:
      1. If mandated by Minnesota Environmental Quality Board Rules, 4410.2000 and 4410.4400 (rarely would a project be mandated).
      2. If the MDH determines an Environmental Assessment process does not provide sufficient analysis.

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