Aquifer Contamination and
Safe Drinking Water:
The Recent Santa Cruz County Experience

Terry Sprouse, Dennis Cory, and Robert Varady

Sprouse, T. D. Cory, and R. Varady 1996. "Aquifer Contamination and Safe Drinking Water: The Recent Santa Cruz County Experience." Hydrology and Water Resources in Arizona and the Southwest, Vol. 26. Proceedings of the 1996 Meeting of the Arizona Section American Water Resource and Hydrology Section, Arizona-Nevada Academy of Science.

Introduction

Santa Cruz County is located in Southern Arizona, north of the Mexican state of Sonora (see Map 1). The Santa Cruz River and its tributary, the Nogales Wash, flow northward from Nogales, Sonora, through Nogales, Arizona, and up to Maricopa County, South of Phoenix. Over the past decade, Santa Cruz County has experienced an unusually high number of problems attributed to water quality. As a recent example, trichloroethylene (TCE) has been found in groundwater near the Potrero Wash (Woodward-Clyde Report, 1995). Additionally, raw sewage, petroleum, heavy metals, DDT, parasites such as Giardia and Cryptosporidium, and fecal coliforms, have been found in the Nogales Wash (Varady and Mack, 1995). Further, elevated levels of nitrate and bacteria also have been found in wells near the Nogales Wash and along wastewater lines. The Nogales International Wastewater Treatment Facility, which is in Arizona, downstream from Nogales, Sonora, does not eliminate bacteriologic contamination caused by wastewater (Varady and Mack, 1995). While only an intermittent problem, these contaminants do pose a potential threat to the underlying aquifer and to the health and lives of humans and livestock that may come into contact with the water.

Following heavy rains in October 1990, volatile organic compounds (VOCs) such as Tetrochloroethylene (PCE) and TCE were found to be at such high levels that the Santa Cruz Board of Supervisors declared a health emergency. Such seasonal rainstorms also commonly cause untreated sewage to run directly into the Wash and through downtown Nogales, from Mexican sources such as outhouses, industry, septic tanks, and sewer lines. The combination of physiography and human action has resulted in other, related environmental crisis. In February 1994, for example, 2,000 residents had to be evacuated from downtown Nogales, Arizona, because of the presence of potentially explosive fumes emanating from the Nogales Wash, the result of petroleum products dumped into the Wash in upstream Sonora. (Varady, Ingram, Milich, 1995).

Among the water-related public-health issues causing the most concern has been the identification of 14 incidences of multiple myeloma and 26 cases of lupus were found in Santa Cruz County between 1989 and 1993. The expected numbers of multiple myeloma and lupus cases for a population the size of Santa Cruz County are five and four, respectively (Varady and Mack, 1995). Although epidemiologists have yet to establish a causal relationship, affected residents believe these problems are caused by environmental contamination, possibly because of TCE in the drinking water (Varady and Mack, 1995).

In response to the growing crises, and recognizing the lack of reliable environmental data from this region (Carter, et al., 1996), the Arizona Department of Health Services announced, on November 24, 1995, the opening of the Sonora-Arizona Border Public Health Office in Nogales, Sonora. Health officials, including a team from the Center for Disease Prevention and Control (CDC), are studying the link between environmental pollutants and cross-border health problems. Data related to incidences and causes of diseases will be shared by the two countries at the new office, which is organized in part by the Governors' Binational Border Health and Environment Task Force (Tucson Citizen, Nov. 25, 1995).

Geography of Santa Cruz County

Low rugged mountain ranges and deep alluvial valleys characterize southern Santa Cruz county. The elevation of Nogales is about 1200 meters and it lies in a narrow valley near the Santa Cruz River. Low hills surround Nogales, but beyond the Santa Cruz River to the east and north lie higher mountains (Udall Center, 1993).

The major drinking water well sites for both Nogales and most of the population of Santa Cruz County lie along the Santa Cruz River. The Santa Cruz River originates in the San Rafael Valley, about 20 miles east of Nogales, flows southward into Mexico, then turns east and reenters the United States about 5 miles east of Nogales. Typical water flows returning from Mexico range from less than 1 cubic feet per second (cfs) in summer to 30 cfs in winter. The stream channel from 2 miles north of the U.S.-Mexico border to Guevavi Ranch, located 6 miles to the north, is usually dry (Lawson, 1995).

Nogales Wash originates in Mexico and flows northward through Nogales until it connects with Potrero Creek and flows into the Santa Cruz River. The Nogales Wash normally would be dry if not for the discharge of water from leaky wastewater and water-supply lines in Sonora. Just downstream of the confluence of the Santa Cruz River with the Nogales Wash lies the International Waste Water Treatment Plant, which treats 14-15 million gallons per day of wastewater from both Nogales, Arizona and Nogales, Sonora (Udall Center, 1993). The treated effluent from the plant is dumped into the normally dry Santa Cruz River. The rejuvenated river flows above ground through Tubac, until it disappears underground before reaching the Pima county line. The dry river bed continues north, heading to Phoenix, where it connects with the Salt River.

Population growth in Santa Cruz county has been dramatic over the past four decades quadrupling between 1950 and 1987-- increasing by 530 percent in Nogales alone. Between 1975 and 1995 the population in Santa Cruz county rose from 17,300 to 32,400. The majority of this growth has taken place in Nogales, the county seat and largest city. Projections indicate that the populations will rise to 54,000 and 76,000 for Nogales and Santa Cruz county respectively, by 2035, or an annual growth rate of 5 percent per year (Udall Center, 1993). Exact numbers are unknown for Nogales, Sonora, but it was estimated to have a population over 100,000 in 1990 (Udall Center, 1993).

Binational Nature of the Problem

The border cities of Nogales, Arizona, and Nogales, Sonora, share not only a common border but also their water resources. Both cities depend upon the Santa Cruz Basin aquifer, which is bisected by the border, for their water supply. The aquifer is fed by the Santa Cruz River, which is also shared by the two countries. Some, but not all, threats to water quality in Santa Cruz County come from across the border, a characteristic that complicates attempts to alleviate water-quality problems.

Drinking-Water Quality

The provision of safe, high-quality drinking water at affordable prices is crucial in maintaining the quality of life in all communities. To be viable, industrial, commercial, residential, and recreational uses of land require a dependable supply of drinking water. This dependency is particularly dramatic in rural areas since many communities are pursuing economic development strategies as a means toward higher incomes and full employment.

The ability of rural communities to provide safe and affordable drinking water is determined in part by the existing quality of supplies. As ground- and surface water become contaminated, both health risks and treatment costs rise. To reduce the risks posed by water pollution, Arizona has developed a complex legislative framework to promote prevention, to regulate potentially polluting activities, and require remediation when water supplies have been negligently contaminated. As a result, implementation and enforcement of surface-water and aquifer-protection legislation have become principal determinants of the quality of water that rural water systems have at their disposal. As pollution risks are efficiently controlled, the integrity of water supplies is bolstered, and the viability of rural water systems is enhanced.

The ability of rural communities to provide safe and affordable drinking water is determined by cost-effective treatment and delivery to consumers. Treatment and delivery, in turn, are largely the concern of public water systems (defined as systems which serve piped water to at least 15 service connections or regularly serve an average of at least 25 people each day at least 60 days per year; EPA, 1993). The federal Safe Drinking Water Act (SDWA) and its amendments regulate public water systems. The EPA has promulgated rules under the SDWA establishing drinking water standards for contaminants, treatment techniques, sampling regimens, record-keeping procedures, and public-notification protocols when SDWA requirements have been violated.

While implementation and enforcement of the SDWA has decreasee health risks posed by drinking contaminated water, these actions also have dramatically increased the cost of treatment and delivery. Compliance costs have been particularly burdensome for small systems. The Environmental Protection Agency (EPA) has estimated that compliance across all systems will cost $1.4 billion annually with many systems having to install new equipment. The impact of these costs on small-system viability is evidenced by the fact that 70 percent of recent SDWA violations have been by small systems (GAO Report), and by forecasts that additional requirements will exacerbate compliance problems for these systems still further.

In September 1993, EPA 's Office of Ground Water and Drinking Water submitted to Congress its "Administration Recommendations for Safe Drinking Water Act Reauthorization." The document included ten major recommendations for revisions to the SDWA. For rural communities, congressional decisions on reauthorization are expected to dramatically impact not only the current viability of small public water systems but also the future plausibility of establishing new systems as needed.

The following sections describe, the SDWA and discuss the SDWA Reauthorization. The paper concludes by identifying issues and needs posed by the potential implementation of the Act, particularly as this applies to rural areas dependent upon small public water systems.

Overview of the Safe Drinking Water Act

The Safe Drinking Water Act (SDWA) was enacted by Congress in 1974 and amended, most recently in 1986. The purpose of the Act is to ensure that drinking water supplied to the public is "safe," that is, free from contaminants that could adversely affect human health. EPA is the federal agency responsibile for promulgating regulations to carry out the provisions of the Act. In particular, EPA is required to set standards and identify treatment techniques for contaminants, establish requirements for monitoring water quality, and ensure the proper operation and maintenance of water systems (Fennemore Craig, 1992). Under the terms of the Act, water suppliers are responsible for making sure that the drinking water meets EPA standards, and for complying with established monitoring, operation, and maintenance protocols. However, it is important to note that the SDWA does not provide funding to support mandated treatment activities.

In Arizona, primary enforcement responsibility for the SDWA is with the state through the Department of Environmental Quality (ADEQ). The EPA plays an oversight role providing guidance, technical assistance, and some financing. While the state has been delegated "primacy," actual enforcement relies heavily upon community water systems demonstrating compliance through periodic sampling and testing requirements. In the unlikely event that state enforcement is inadequate, emergency federal enforcement provisions are available to the EPA in the form of issuing orders for public notification of SDWA violations, mandating clean up, requiring the use of an alternative supply, and/or imposing daily fines.

There are three major types of requirements in the SDWA: 1) sampling and reporting, 2) record keeping, and 3) public notification (EPA, 1993). Each supplier of water must collect samples from the water system, take them to a certified laboratory for analysis, and send the results toADEQ. The laboratory results, name of the person(s) who collected the samples, dates and locations of sampling points, steps taken to correct problems, sanitary survey reports, and other information must be kept on file by the water supplier. Finally, any time there is a violation of a requirement, the public must be notified.

A significant advantage in the state assuming enforcement "primacy" is that some degree of flexibility can be exercised by ADEQ in implementing the Act. For example, some requirements can be made stricter, such as requiring operator certification or minimum design standards. On the other hand, variances and exemptions can be issued from some of the requirements for systems that are having major technical or financial problems associated with compliance.

Two types of drinking-water standards which apply to all public water systems in Arizona: primary and secondary. Primary standards are health-based and enforceable. Secondary standards are based on the aesthetic quality of the water and are non-enforceable guidelines. In the case of primary standards, maximum contaminant levels (MCLs) are concentrations that are judged to be associated with health risks, given cost and technology constraints. For chemicals that are believed to cause cancer, the goal is to set MCLs as close to zero as is technically and economically feasible. For contaminants that are difficult or costly to measure, treatment techniques are required in lieu of specifying an MCL. Secondary MCLs have been established as guidelines associated with the aesthetic quality of water, such as taste, odor, or color, and are not enforceable.

Underlying any discussion or evaluation of the SDWA is an inescapable tension between capturing the documented health benefits associated with drinking safe water and bearing the

significant costs of precaution. Monitoring turbidity, bacteria, total chloroform, lead and copper, radionucledes, as well as inorganic, synthetic organic, volatile organic, and chlorinated organic chemicals can help reduce an array of health risks, varying from gastroenteric infections, to liver and kidney damage, to several types of cancer. The additional costs imposed by monitoring, sampling, treatment, and record keeping are substantial, and for many small water systems particularly burdensome.

Sampling, Record-keeping, and Public Notification

The legislative intent of the SDWA is to ensure that drinking water poses minimal risks to public health. The EPA is charged with implementing the intent of the Act and does so in two steps. First, "safe" drinking water is defined during the process of setting MCL standards and establishing treatment techniques. That is, drinking water that is in compliance with MCL standards and treatment requirements is judged to be safe for public-health purposes. Second, protocols for sampling, record-keeping, and public notification have been established to promote the compliance of public water systems with EPA treatment and MCL safety standards. A brief description of these protocols follows.

In general, sampling requirements are detailed and complex, but the overall intent is to tailor sampling procedures to the type of containment being analyzed. The requirements address the types of analyses to be performed, the frequency of sampling, the location within the water system where sampling must occur, preservation techniques, transportation precautions, and laboratory certification. Some public water systems (e.g., small water systems, such as systems serving less than 3,300 people; or transient, non-community systems, such as systems serving hotels or restaurants) may receive variances or exemptions to these requirements.

In addition to sampling activities, public water systems are required to keep records on several aspects of sampling, including chemical analyses, MCL violations, enforcement actions, and sanitary surveys. Upon analysis of a constituent, a certified laboratory must report the results to ADEQ within three working days. If the analysis shows an MCL violation, then reporting must be within 24 hours of the completion of the analysis. All systems, regardless of distinguishing factors, are responsible for reporting all chemical analysis results, violations, and public notices to ADEQ.

In the event of a violation, public notification takes numerous forms, such as hand delivery, electronic media, continuous posting and direct mail, in order to insure that affected individuals will be adequately informed. Notification procedures are described for each type of compliance violation. Two categories of violations are distinguished: tier 1 and 2. Tier 1 violations pose serious and direct risks to human health either through chronic (non-acute) or brief (acute) exposures. Exceeding an MCL or violating treatment technique requirements are examples of Tier 1 violations. Tier 2 violations are less directly threatening to human health and generally violate SDWA specifications on a procedural basis. Examples include a failure to monitor the water supply or to follow prescribed sampling and analysis methods. In general, public notices must include a discussion of the violation; the potential for adverse effects; the population at risk such as children or pregnant women, the steps taken to correct the problem; and recommended precautions.

ADEQ and the State's Primacy Role

The drinking-water program was designed so that the day-to-day responsibility to carry out the program would be delegated to approved state governmental agencies while the EPA provided guidance, assistance and limited funding. The state of Arizona has been granted primacy through ADEQ and therefore accepts the obligation to monitor and enforce EPA requirements pertaining to SDWA. To assess compliance, ADEQ has established rules and procedures that address the production, treatment, distribution and testing of public water systems.

The determination of compliance unfolds through an inventory and analysis of each system. A key component is the sanitary survey, an on site review of the system's water source, facilities, equipment, and operation and maintenance, performed approximately every five years. Upon inspection, a compliance status of 1, r ly moderate risks to public health. Operational and maintenance procedures are most often the cause of violations; however, sampling procedures are also potential candidates. Examples of level-two violations include inadequate site cleanup, lack of proper fencing and security, susceptibility of system to freezing, or user complaints. The issuance of an administrative order is the generally-accepted practice for redressing "substantial-compliance" violations.

A compliance designation of 3 denotes a system in non-compliance. Systems in non-compliance may have exceeded an MCL, failed to properly implement treatment requirements, ignored operation and maintenance procedures, or simply failed to sample the water. Examples of an operational and maintenance violation that would result in a rating of 3 include failing to install a pressure gauge, failing to chlorinate when necessary, or not having the wellsite graded properly. Initially, correction of a violation is addressed through an administrative order. If the system fails to comply, the order may proceed to full closure of the system.

SDWA Cost Implications for Small Public Water Systems

The 1986 amendments to the SDWA mandated a dramatic increase in the number of drinking-water contaminants to be regulated. The potential economic impact of this regulatory expansion was recently assessed by ADEQ (1994). For small systems, ADEQ projects that investment costs could be substantial when treatment becomes necessary. For example, the capital cost of treating inorganic contaminants is estimated to vary between $61,000 and $135,000 per system. While these potential costs are high, the likelihood that they would actually be incurred is low since groundwater quality is good over most of the Santa Cruz Basin.

While additional capital costs may be avoided by small systems in Santa Cruz County, the same cannot be said of sampling costs. The 1986 amendments called for regulating an additional 66 contaminants by 1989 and for further expanding the number of MCLs by 25 every year thereafter. The sampling costs associated with this regulatory expansion are likely to become progressively more burdensome if small systems are to comply.

Recent evidence documents that a significant number of small public water systems are already in non-compliance with the SDWA. As new regulations are promulgated and enforced, systems can choose to partially comply, merge with other systems, borrow required investment

funds, charge higher prices to consumers, act on some combination of the above, or shut down. The relative desirability of these alternatives will be greatly affected by the specification of the SDWA reauthorization bill currently being debated in Congress.

Reauthorization of the Safe Drinking Water Act

In the 1993 version of the reauthorization, EPA submitted to Congress an extensive list of proposed revisions to the SDWA (Trager, et al., 1994). The original reauthorization bill, sponsored by Senator Max Baucus, included many of the recommendations proposed by the EPA, but failed to gain bipartisan support due to a failure to address the MCL standard-setting process. A second bill was subsequently introduced requiring increased risk/benefit analysis in standard-setting, but was opposed by the EPA on the grounds that the mandated analysis would unrealistically delay the issuance of regulations. The 1995 Senate Bill (S. 1316), which was approved by a 99-0 margin but still awaits House approval, incorporated the more stringent risk/benefit analysis as well as addressing other public water system concerns (Environmental Law Update, October 1995). Ultimately, successful legislation will have to marry a variety of concerns. Particularly prominent among these concerns is the task of safeguarding public health while limiting the financial burden imposed by unfunded federal mandates.

Several of EPA's recommendations have general applicability across public water systems regardless of size. For example, EPA wants to maintain and strengthen state primacy, a position strongly supported by ADEQ. In addition, the recommendations call for mandatory state programs to protect groundwater and surface-water supplies, and for mandatory minimum operator certification program criteria to apply to all water systems, including small systems. Programs to protect water supplies have existenced for many years in Arizona, and have been substantially revised and updated since 1986. Similarly, operator-certification programs are in place already. In these regards, Arizona has acted proactively in an attempt to strengthen the state's ability to provide affordable, safe drinking water.

Of direct concern to small public water systems are the following EPA recommendations (all addressed by S. 1316):

- Establishing (and adequately funding) a Drinking Water State Revolving Fund to provide low-interest loans to help water systems meet the costs of SDWA compliance;

- Requiring state-implemented programs to assess the viability of existing small systems and to prevent the formation of new, nonviable systems while restructuring and/or consolidating nonviable, noncompliant small systems;

- Establishing a less expensive "best available technology" that small systems could use to comply with the SDWA if they would not otherwise be able to achieve compliance through restructuring; and

- Allowing for longer compliance deadlines for making drinking-water standards effective, moving from 18 months after EPA promulgation to 60 months. S. 1316 also authorizes the EPA to grant variances to small public water systems serving fewer than 10,000 persons.

Noticeably absent from the list of EPA recommendations are suggestions for revising the standard-setting process itself. Between 1974 and 1986, EPA issued rules regulating 23 drinking-water contaminants. The 1986 SDWA amendments required EPA to establish national drinking-water standards or treatment techniques for 83 contaminants by 1989, and for 25 additional contaminants every three years thereafter. Critics of the program argue that this regulatory expansion places a disproportionate burden on small public water systems in rural areas by failing to account for local health-risk impacts and budgetary realities. That is, failure to base drinking-water standards on a site specific, risk-benefit basis runs the risk of burdening drinking-water programs to the point of collapse. In response to these criticisms, S. 1316 requires that the EPA balance benefits and costs before promulgating a regulation for a new contaminant.

SDWA Compliance in Santa Cruz County

The authors analyzed the compliance status of public water systems in Santa Cruz Active Management Area (AMA) with respect to the SDWA. An AMA is an area, designated by the Arizona Groundwater Code, which needs water management programs to limit groundwater use. Data from the ADEQ were used to determine the compliance status of public water systems from the most recent survey completed in June 1994 (ADEQ, 1994). Eighty-six percent of the population in Santa Cruz County use public water systems. Private water systems, which compose the remaining 14 percent, are not required to keep records or report to the ADEQ.

Of the 26 public water systems in Santa Cruz County 81 percent are classified as very small (fewer than 1000 persons served), 15 percent are classified as small (between 1,000 and 3,300 persons served), and 4 percent are classified as medium (between 3,301 to 50,000 persons served ) (figure 1). Only four of the 26 systems are in full compliance with the SDWA. Of these four, one system is very small and three are small.

Figure 1

System size does appear to affect the probability of being in compliance or non-compliance with SDWA regulations (figure 2). There are no large public water systems in the Santa Cruz AMA. Only one medium sized system operates in the county and it is in substantial compliance with the SDWA. There are four small systems, three of which are in full compliance and one which is in non-compliance. Of the 21 remaining very small systems, one (5 percent) are in full compliance, two (9 percent) are in substantial compliance, and 21 (86 percent) are in non-compliance.

Figure 2

In terms of bacterial contamination, seven systems were not in compliance with the SDWA. MCL violations occurred from a minimum of one to a maximum of three months in each of these seven systems. All of the bacterial violations occurred in very small systems which accounted for 18 percent of all the systems in Santa Cruz County (figure 3). Two of the seven systems in non-compliance were in "acute" violation, meaning that the coliforms found in the water samples contained fecal matter, which can be from animal or human sources. The health effects of fecal coliform microbiological contamination can include gastrointestinal illness, dysentery, hepatitis, typhoid fever, cholera, giardiasis, and crytosporidiosis.

Figure 3

In one case, a very small system, inorganic MCLs were exceeded for nitrate contamination (figure 3). Nitrates can cause methemoglobinemia, also known as "blue baby syndrome."

Fifty-eight percent of the public water systems were in violation of SDWA regulations because of failure to comply with proper sampling procedures (figure 4). Thirty-five percent of the water systems were out of compliance because they did not have an appropriately certified operator, while 19 percent had major operation and maintenance deficiencies. Failure to comply with SDWA standards does not necessarily mean increased health risks but more likely an inability or unwillingness to meet the increasing costs associated with compliance.

Figure 4

Results from Santa Cruz County may not be unique to this area. Similar results were found from a study of eastern Pima County where 50.5 percent of the small public water systems were in non-compliance with SDWA standards. Two percent of these small systems failed to meet MCL standards, and posed serious risks to human health. Sixty-four percent of the small systems failed to comply with operator certification, 57.1 percent failed to comply with sampling procedures, and 17.8 percent failed to comply with operation and maintenance standards (Cory and Moy, 1994).

Statewide, of the 1,540 public water systems in the state of Arizona that served 1,000 people or fewer in 1990, 826 or 54 percent were in non-compliance, with at least one major violation (Arroyo, 1991, p. 3).

Potentially dangerous contaminants have been detected in Arizona public water systems, and over half of the smaller systems in both Pima and Santa Cruz Counties are not consistently sampling their water with the regularity that is required to protect public health. This presents a threat to the public health. In those instances, the safety net established by the SDWA to protect the public is not working.

Funding for Small Systems

While additional financial resources would enable greater compliance, borrowing money is not even an option for most small water systems. Lending institutions are not inclined to loan money to systems which service so few customers. In addition, small systems have a limited credit base and limited market recognition, further reducing their chances of receiving loans. The same conditions that establish a small system as financially needy also undermine their efforts to receive funding. Small systems can usually only receive loans at high interest rates.

Funds are available to municipal water systems for small cities and towns through federal, state, and private institutions.

State Funding for Drinking Water Systems: "The States and Small Cities Program" of the Community Development Block Grant (CDBG) program administered by the Department of Housing and Urban Development, grants awards directly to states. The states, in turn, allocate funds to small non-metropolitan counties (populations of less than 50,000). The Arizona Department of Commerce administers the program on behalf of non-entitlement communities which are located outside of Maricopa and Pima Counties, excluding the city of Yuma. Funds are allocated to the following planning regions or Councils of Governments (COGs): Northern Arizona Council of Governments (NACOG) for Coconino, Apache, Navajo, and Yavapai counties; Western Arizona Council of Governments (WACOG) for La Paz, Mohave, and Yuma counties; Central Arizona Association of Governments (CAAG) for Gila and Pinal counties; and South Eastern Association of Governments (SEAGO) for Cochise, Graham, Greenlee, and Santa Cruz counties (ADEQ, 1995).

The average grant amount for the States and Small Cities program is $250,000 to localities with populations that average fewer than 5,000 persons. Improvements in public facilities are the most frequently funded projects, representing 54 percent of all funding. Water, sewer and flood- protection projects represent the largest share of public facilities funded. Although the state of Arizona commonly provides grants for public-facility projects such as water projects, they usually do not provide all the financing needed to complete a project. Localities are expected to "leverage" or secure grants or loans from other sources. For fiscal year 1995 Arizona expects to receive $9.7 million in grants from the CDBG program (ADEQ, 1995).

State Revolving Funds: The U.S. House of Representatives passed the Clean Water Act amendments in the summer of 1995 authorizing the use of state revolving fund (SRF) monies for communities to increase water use efficiency for projects with the goal of protecting water quality. Loans from SRF have extended repayment periods for loans made to disadvantaged communities, and allows SRF monies to be used for technical, planning, and other related assistance to small systems (Arizona Environmental Law Update, July 1995). As of December 1995 the measure has not yet become law.

Federal Funding: The Rural Development Administration (RDA) Water and Waste Disposal (WWD) program is authorized to finance water systems in small municipalities with populations of 10,000 or fewer, and non-profit organizations. The Farmers Home Administration administers the program at the State level.

Eligibility requirements include: the project must be located in a rural area with a population of 10,000 or less; applicants are unable to obtain reasonable credit rates and terms elsewhere; the project must be determined to be technically, environmentally, legally, and financially feasible.

The maximum term on loans is 40 years. Interest rates are set based on current market yields, but the rate to the borrower also depends upon the median household income of the service area. Borrowers can receive one of three interest rates, the lowest being 4.5 percent for areas with low incomes and an existing water-contamination problem.

Arizona Small Utilities Association: The Arizona Small Utilities Association, funded by the National Rural Water Association and the EPA, provides technical advice, but no funding, to rural water systems with populations of fewer than 10,000 people, that lie outside of incorporated cities.

Private Lending Institutions: Many private lending institutions will fund drinking-water system improvements, with the major drawback that interest rates are higher than federally backed loans. CoBank, or the Rural Cooperative Bank, makes loans to local governments for drinking-water system improvements. CoBank is part of the Farm Credit System, created by Congress in 1917. Of the bank's 2,000 customers, 57 are rural water and waste disposal systems which receive loans totaling $144 million. While not as attractive as federal loans, CoBank loans are superior to those from regular banks (Facts About CoBank, 1993).

Recent Developments in Santa Cruz County

Plans for New WWTP in Santa Cruz County: The Environmental Protection Agency (EPA) held focus group meeting in September 1995 to incorporate public input into the decision making process for selecting a site for the new Nogales Wastewater Facilities Project. The new treatment plant will help address transborder water quality problems and could in fact be located on the Mexico side. Community outreach activities are being coordinated by the EPA, the City of Nogales, the International Boundary and Water Commission, ADEQ, and South Eastern Arizona Association of Governments (SEAGO). The facilities-planning process will take one year to identify alternatives and assess feasibility, at which point the environmental-review process will begin.

Border Environment Cooperation Commission Begins Certifying Water Projects: The Border Environment Cooperation Commission (BECC) was created in accordance with the North American Free Trade Agreement (NAFTA) environmental side accords. Its mission is to address environmental problems in the U.S.-Mexico border region and it began to certify water projects in September of 1995 (Sprouse and Brown, 1995). BECC's projects deal with potable water, and a water-supply and distribution project, with a projected cost of $42 million, for Nogales, Sonora, was approved by the board in January 1996 (Tucson Citizen, January 19, 1996). BECC, and its sister institution, the North American Development Bank, provide another source of funding to help improve overall water quality both in Sonora, Mexico and in Santa Cruz County.

Future Outlook

Supporters of strict SDWA regulations are quick to argue that evisceration of the program is likely to be "penny wise, but pound foolish," since the high price of water treatment is more than justified by the cost savings associated with the prevention of disease. For example, the EPA estimates that the Surface Water Treatment Rule alone helps avoid 90,000 cases annually of acute gastroenteritis, and that the Lead and Copper Rule can reasonably be expected to reduce exposure to 140 million people, including 18 million children, to unsafe levels of lead in their blood (GAO Report).

Unfortunately, many small systems do not comply with SDWA standards or monitoring requirements due to disproportionate costs. Similarly, according to the EPA, the primary reason for state drinking-water non-compliance is resource scarcity, as reflected in prohibitive costs to implement new regulations, competition with other state programs for scarce financial resources, legislative priorities, and state budget shortfalls.

To address financing problems faced by small water systems, the EPA in 1990 suggested a "multicommunity cooperative arrangement" approach in a report entitled "Environmental Pollution Control Alternatives: Drinking Water Treatment in Small Communities". Under this type of arrangement, small communities would share resources with other communities, large or small, through a regional water supply authority. The benefits of such an arrangement would make use of economies of scale and result in increased cost effectiveness, better water quality, and more efficient operation and management. Some of the types of cooperative approaches available to small water systems include:

-Centralizization of functions. By working together, a group of small systems would be able to centralize purchasing, maintenance, engineering service, laboratory services, and billing. In addition, several small systems could better afford resources, such as full-time highly skilled personnel, by having them work part-time at different locations.

-Interconnection of existing systems. To take advantage of economies of scale, two small systems can be interconnected, or a large system with a small system. The only restriction is that the two systems be in close physical proximity.

-Utilization of satellite facilities. Smaller systems sometimes can access the resources of larger systems, even without a physical or economic connection to the larger facility. These "satellite" facilities have access to resources such as: technical, managerial, or operational assistance; operation and maintenance responsibility; or wholesale-priced treated water.

-Establishment of water districts. Water districts, formed by county officials, can combine existing districts and physically connect water systems. By creating a water district, privately owned systems can collectively become eligible for public grants and loans, when available.

-Creation of county or state utilities. Within its boundaries, a county or state government can appoint a board to construct, operate, and maintain a water system. The advantage of such an approach is that bonds and property taxes may be used either to construct a new facility, or to upgrade an existing one.

While a great deal of uncertainty remains about the net impact of EPA's recommendations to revise the SDWA, and the reauthorization debates in Congress, one effect on consumers of drinking water in rural areas is inescapable: as consumers demand higher quality water and as stricter drinking-water standards are implemented, public water systems will be forced to charge higher prices. New and creative approaches, such as those mentioned above, will have to be considered by small water systems to help keep costs down while complying with public-health regulations.