1. Reprinted with permission from JULY 18, 2016 edition of New Jersey Law Journal. © 2016 ALM Media Properties, LLC. All rights reserved. Further
duplication without permission is prohibited.
Barnett is a partner and Press is an
associate in the Environmental Law
Group at Connell Foley in Roseland.
Barnett previously served as a captain
and bioenvironmental engineer in the
United States Air Force.
JULY 18, 2016 ESTABLISHED 1878
ENVIRONMENTAL LAW
Addressing Unsafe Drinking Water Before the Next
Crisis Hits
By Steve Barnett and Scott M. Press
Much like bridges, tunnels and roads, a
water supply system is a critical part of the
nation's infrastructure. As such, it requires
a combination of attention and oversight
in order to be sufficiently maintained for
purposes of providing safe drinking water
to consumers. Despite this, the regulatory
framework for testing and reporting on
drinking water sources, delivery systems
and end uses has glaring gaps. Water
systems and municipalities are often
overwhelmed by numerous state and
federal regulations surrounding drinking
water, as well as the perceived expense
associated with replacing aging
infrastructure. However, there are funding
sources available that make updating New
Jersey's water systems an attractive option
that should be considered in order to
safeguard human health.
The nationwide attention garnered after
the crisis involving lead in the drinking
water in Flint, Michigan, and more locally
in school districts in Newark, New Jersey,
has raised the profile of the deficiencies of
many water supply systems. Issues
resulting from our outdated infrastructure
are nothing new; in fact, in its most recent
report pertaining to the country's drinking
water, which was issued in 2013, the
American Society of Civil Engineers
graded the country's current drinking
water infrastructure system with a "D"
rating. As concluded in the report, many
of the estimated one million miles of water
mains in place in the United States contain
pipes that have been buried underground
and out of sight for long periods of time,
some dating back to the mid-1800s, with
no examination of these pipes until
problems are reported or identified.
Of course, there is no shortage of
complex, often interconnected regulations
intended to ensure our drinking water
stays safe. The federal Safe Drinking
Water Act (SDWA) sets the national
standards for public water systems across
the country. 42 U.S.C. §300g et seq.
Public water systems are defined under the
SDWA as systems with "pipes or other
constructed conveyances … [with] at least
fifteen service connections or [one that]
regularly serves at least twenty-five
individuals." 42 U.S.C. §300f(4)(A). The
SDWA also sets the national standards for
identification of maximum levels of
contaminants permitted in water systems;
provides schedules and deadlines for
determining and publishing the
contaminant level goals; and assesses the
risk of the various contaminants in those
systems and communicates those findings
to the public. 42 U.S.C. §300g-1(b)(1)-(6).
While the SDWA sets national
contaminant standards, it grants each state
"primary enforcement responsibility for
public water systems" in each respective
state. 42 U.S.C. §300g-2. New Jersey's
Safe Drinking Water Act (NJSDWA)
grants the New Jersey Department of
Environmental Protection (NJDEP)
authority to assume enforcement
responsibility under the SDWA. N.J.S.A.
§58:12A-2. The NJDEP regulates the
NJSDWA pursuant to the rules
implemented under N.J.A.C. §7:10-1.1 et
seq., which adopts and incorporates the
National Primary Drinking Water
Regulations. N.J.A.C. §7:10-5.1
(regulations found at 40 C.F.R. §141 et
seq.).
When a public water system is found to be
non-compliant with the drinking water
regulations or fails to perform the requisite
monitoring, the supplier is required to give
notice of that fact and the possible health
effect to the government and media and in
customers' water bills, at least once every
three months as long as the violation
continues. N.J.S.A. §58:12A-8. An owner
or operator of a public community water
system found to contain levels of
contaminants in excess of the permissible
levels has one year from the date of
receiving the test results to take action to
bring the water into compliance with the
standard. N.J.S.A. §58:12A-15(a).
A review of these regulations reveals that
there are limitations to the framework that
cannot be eliminated altogether. In order to
ensure that safe drinking water reaches the
public, it is crucial that the systems comply
with the monitoring, sampling and reporting
requirements set forth in the various statutes
and regulations, and therefore resources are
often dedicated to meeting these
requirements rather than upgrading the

2. NEW JERSEY LAW JOURNAL, JULY 18, 2016 2
systems. The effect of this resource
allocation is that when a deficiency in the
safety net results in the contamination of
our water supply, the initial reaction is
often to patch the problem since system
replacement is seen as being extremely
costly. However, as with any form of
public infrastructure, our water supply
system must be maintained and upgraded,
and the funding for this can be obtained
from various public sources. The process
for obtaining funding may be complex, but
it offers a better long-term solution than a
quick fix or mere repair.
There are a number of different funding
sources for necessary water-supply system
upgrades. For example, the SDWA
provides an avenue for funding to states
that establish drinking-water treatment
revolving-loan funds, the aim of which is
to assist water systems in financing the
cost of maintaining the infrastructure
necessary to comply with the SDWA. See
42 U.S.C. §300j-12. In order to be eligible
to receive money from the Drinking Water
State Revolving Fund, each state must
annually prepare an intended use plan to
identify the use and allotment of the
federal money. 42 U.S.C. §300j-12(b).
In New Jersey, the NJDEP's intended use
plan serves a multi-purpose function, as
the plan also determines the priority in
which money can be distributed to water
systems that qualify for funding from
another source, the New Jersey
Environmental Infrastructure Trust
(NJEIT). N.J.A.C. §7:22-4.7. See also
N.J.A.C. §7:22-3.7 (setting forth the
criteria for project loan priority). One
purpose of the NJEIT is to make funds
available for loans at zero or low interest.
See N.J.S.A. §58:11B-1 et seq.
(establishing the NJEIT). According to the
NJEIT's most recent financial plan,
submitted in conjunction with the NJDEP
as part of the New Jersey Environmental
Infrastructure Financing Program
(NJEIFP), since the first loan was issued
in 1987:
[T]he NJEIFP has issued approximately
1,300 long‐term project loans totaling over
$6.5 billion for water quality and public
health related environmental infrastructure
projects … reduc[ing] total interest costs
for municipalities, counties, authorities
and public and private water utilities on
average, thirty‐five percent (35%) of each
borrower's original loan balance producing
interest savings for taxpayers and
ratepayers of $2.3 billion.
To receive funding, borrowers enter into
two loan agreements, one with the NJEIT
and another with the State by way of the
NJDEP. See N.J.A.C. §7:22-3, §7:22-4.
Historically, approximately half of a
project's costs obtain funding from each
source.
The NJEIT is merely one available source
of public funding related to upgrading
water supply systems. Another funding
source that was established more recently
in response to the country's economic
crisis is the Economic Redevelopment and
Growth Grant Program, which provides
incentive grants to reimburse developers
for all or a portion of project financing
gaps. N.J.S.A. §52:27D-489d. In order to
qualify for these grants, the project must
be located in a qualifying economic
redevelopment and growth grant incentive
area; construction of the project must not
have commenced prior to submission of
an application (with certain exceptions); a
project financing gap exists; and the
public assistance will result in net benefits
to the state equaling at least 110 percent of
the amount of grant assistance. N.J.A.C.
§19:31-4.3.
Another attractive option that can
incentivize entities to perform large-scale
upgrades to our water supply system is the
Grow New Jersey Assistance Program.
See N.J.S.A. §34:1B-242 et seq. The
purpose of this program is to encourage
economic development and job creation in
New Jersey by providing tax credits to
eligible businesses that demonstrate: that
they will make capital investments at a
qualified business facility located in a
qualified incentive area; that the facility is
"constructed in accordance with the
minimum environmental and sustainability
standards" as defined in the act; that the
capital investment resultant from the tax
credits "will yield a net positive benefit to
the State equaling at least 110 percent of
the requested tax credit allocation
amount," which is based on the benefits
generated following the completion of the
project; and, finally, that the award of the
credits will be a material factor in the
businesses decision to create or retain the
minimum number of jobs. N.J.S.A.
§34:1B-244(a).
Yet another tax based funding opportunity
can be found in the Environmental
Opportunity Zone Act, N.J.S.A. §54:4-
3.150 et seq., which allows municipalities
to designate areas as exempt from local
property taxes, which can also be a
method to facilitate construction, upgrades
or remediation of utilities services such as
water supply and delivery systems.
The aforementioned opportunities are a
glimpse into the many sources of funding
(both state and federal) that can be sought,
utilized and applied toward making
necessary water supply system upgrades.
Other options may include: Hazardous
Discharge Site Remediation Fund, N.J.S.A.
§§58:10B-5, 58:10B-6 (allocating money
from New Jersey's hazardous discharge site
remediation fund for certain purposes
including the redevelopment of
contaminated property); Water and Waste
Disposal Guaranteed Loans, 7 C.F.R.
§1779.1 (providing loans for construction or
improvements to systems that provide water
to rural communities); and Small Cities
Community Development Block Grants, 24
C.F.R. §570.480 (offering funds to low
income communities for economic
development purposes).
Although upgrading our state's water supply
systems will prove to be a costly venture, it
is crucial that facilities seek out funding
sources to facilitate the necessary upgrades,
rather than permit our state's water supply
systems to degrade in quality and
potentially harm the public health. As the
national spotlight from the lead drinking
water crisis keeps the focus on the
monitoring and reporting of drinking water
contamination, it is important that we
prioritize making the necessary upgrades to
this essential part of our infrastructure
before the next drinking water crisis
occurs.•