Document ID: EPA-HQ-OW-2005-0034-0100
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2007-10-10T04:00Z

Office of Water (4607M)     EPA-815-R0-7022   September 2007    
www.epa.gov/safewater

CONTENTS

  TOC \o "1-2" \h \z \t "section,1,subsection,2"    HYPERLINK \l
"_Toc162867958"  1	Introduction	  PAGEREF _Toc162867958 \h  4  

  HYPERLINK \l "_Toc162867959"  1.1     Summary of Changes	  PAGEREF
_Toc162867959 \h  4  

  HYPERLINK \l "_Toc162867960"  1.2	 Summary of Differences With the EA
for the Proposed Rule	  PAGEREF _Toc162867960 \h  5  

  HYPERLINK \l "_Toc162867961"  1.3	 Document Organization	  PAGEREF
_Toc162867961 \h  5  

  HYPERLINK \l "_Toc162867962"  2	Need for the Rule	  PAGEREF
_Toc162867962 \h  6  

  HYPERLINK \l "_Toc162867963"  2.1	 Public Health Concerns Related to
Lead and Copper Exposure	  PAGEREF _Toc162867963 \h  6  

  HYPERLINK \l "_Toc162867964"  2.2	  Regulatory History	  PAGEREF
_Toc162867964 \h  7  

  HYPERLINK \l "_Toc162867965"  2.3	 Comprehensive Review of the LCR	 
PAGEREF _Toc162867965 \h  10  

  HYPERLINK \l "_Toc162867966"  2.4 	Rationale for the Regulation	 
PAGEREF _Toc162867966 \h  17  

  HYPERLINK \l "_Toc162867967"  3	Regulatory Changes and Alternatives
Considered	  PAGEREF _Toc162867967 \h  18  

  HYPERLINK \l "_Toc162867968"  3.1 	Regulatory change III.A - Minimum
number of samples required	  PAGEREF _Toc162867968 \h  18  

  HYPERLINK \l "_Toc162867969"  3.2 	Regulatory change III.B -
Definitions for compliance and monitoring periods	  PAGEREF
_Toc162867969 \h  20  

  HYPERLINK \l "_Toc162867970"  3.3 	Regulatory change III.C - Reduced
monitoring criteria	  PAGEREF _Toc162867970 \h  21  

  HYPERLINK \l "_Toc162867971"  3.4 	Regulatory change III.D - Advanced
notification and approval requirement	  PAGEREF _Toc162867971 \h  22  

  HYPERLINK \l "_Toc162867972"  3.5 	Regulatory change III.E -
Requirement to provide sampling results to consumers	  PAGEREF
_Toc162867972 \h  24  

  HYPERLINK \l "_Toc162867973"  3.6 	Regulatory change III.F – Public
education requirements	  PAGEREF _Toc162867973 \h  25  

  HYPERLINK \l "_Toc162867974"  3.7 	Regulatory change III.G -
Reevaluation of Lead Service Lines deemed replaced.	  PAGEREF
_Toc162867974 \h  29  

  HYPERLINK \l "_Toc162867975"  4	Costs of Regulatory Changes	  PAGEREF
_Toc162867975 \h  30  

  HYPERLINK \l "_Toc162867976"  4.1	 Overall Cost Methodologies and
Assumptions	  PAGEREF _Toc162867976 \h  31  

  HYPERLINK \l "_Toc162867977"  4.2 	Direct Costs Associated with
Regulatory Change III.A	  PAGEREF _Toc162867977 \h  35  

  HYPERLINK \l "_Toc162867978"  4.3    Direct Costs Associated with
Regulatory Change III.B	  PAGEREF _Toc162867978 \h  39  

  HYPERLINK \l "_Toc162867979"  4.4 	Direct Costs Associated with
Regulatory Change III.C	  PAGEREF _Toc162867979 \h  40  

  HYPERLINK \l "_Toc162867980"  4.5 	Direct Costs Associated with
Regulatory Change III.D	  PAGEREF _Toc162867980 \h  43  

  HYPERLINK \l "_Toc162867981"  4.6 	Direct Costs Associated with
Regulatory Change III.E	  PAGEREF _Toc162867981 \h  47  

  HYPERLINK \l "_Toc162867982"  4.7	Direct Costs Associated with
Regulatory Change III.F	  PAGEREF _Toc162867982 \h  50  

  HYPERLINK \l "_Toc162867983"  4.8 	Direct Costs Associated with
Regulatory Change III.G	  PAGEREF _Toc162867983 \h  62  

  HYPERLINK \l "_Toc162867984"  4.9	Summary of Average Annual Costs	 
PAGEREF _Toc162867984 \h  65  

  HYPERLINK \l "_Toc162867985"  4.10 	Costs to Review and Implement
Regulatory Changes	  PAGEREF _Toc162867985 \h  66  

  HYPERLINK \l "_Toc162867986"  5	Indirect Cost and Health Risk
Reduction Implications of Rule Changes	  PAGEREF _Toc162867986 \h  68  

  HYPERLINK \l "_Toc162867987"  6	Administrative Requirements	  PAGEREF
_Toc162867987 \h  73  

  HYPERLINK \l "_Toc162867988"  6.1 	Executive Order 12866:  Regulatory
Planning and Review	  PAGEREF _Toc162867988 \h  73  

  HYPERLINK \l "_Toc162867989"  6.2 	Paperwork Reduction Act	  PAGEREF
_Toc162867989 \h  73  

  HYPERLINK \l "_Toc162867990"  6.3 	Regulatory Flexibility Act	 
PAGEREF _Toc162867990 \h  76  

  HYPERLINK \l "_Toc162867991"  6.4 	Unfunded Mandates Reform Act	 
PAGEREF _Toc162867991 \h  83  

  HYPERLINK \l "_Toc162867992"  6.5 	Executive Order 13132:  Federalism	
 PAGEREF _Toc162867992 \h  84  

  HYPERLINK \l "_Toc162867993"  6.6 	Executive Order 13175: 
Consultation and Coordination With Indian Tribal Governments	  PAGEREF
_Toc162867993 \h  85  

  HYPERLINK \l "_Toc162867994"  6.7 	Executive Order 13045:  Protection
of Children from Environmental Health Risks and Safety Risks	  PAGEREF
_Toc162867994 \h  85  

  HYPERLINK \l "_Toc162867995"  6.8	 Executive Order 13211:  Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use	  PAGEREF _Toc162867995 \h  86  

  HYPERLINK \l "_Toc162867996"  6.9 	National Technology Transfer and
Advancement Act	  PAGEREF _Toc162867996 \h  86  

  HYPERLINK \l "_Toc162867997"  REFERENCES	  PAGEREF _Toc162867997 \h 
87  

 LIST OF EXHIBITS

  TOC \h \z \t "Exhibit" \c    HYPERLINK \l "_Toc174174494"  Exhibit
ES-2:  Summary of Annual Direct Costs to Systems and States from
Regulatory Changes	  PAGEREF _Toc174174494 \h  2  

  HYPERLINK \l "_Toc174174495"  Exhibit ES-3: Summary of One-Time Direct
Costs	  PAGEREF _Toc174174495 \h  3  

  HYPERLINK \l "_Toc174174496"  Exhibit 1: Systems Exceeding the Lead
Action Level Since 2003	  PAGEREF _Toc174174496 \h  13  

  HYPERLINK \l "_Toc174174497"  Exhibit 2: Systems Exceeding the Lead
Action Level Since 2000	  PAGEREF _Toc174174497 \h  14  

  HYPERLINK \l "_Toc174174498"  Exhibit 3: Lead 90th Percentile Levels
for 166 Large Water Utilities - Then and Now	  PAGEREF _Toc174174498 \h 
15  

  HYPERLINK \l "_Toc174174499"  Exhibit 4: Summary of Direct and
Indirect Implications of the LCR Short Term Regulatory Changes	  PAGEREF
_Toc174174499 \h  30  

  HYPERLINK \l "_Toc174174500"  Exhibit 5: Number of Systems by Size
Category and Type Subject to the LCR	  PAGEREF _Toc174174500 \h  33  

  HYPERLINK \l "_Toc174174501"  Exhibit 6:  Direct Costs Associated with
Regulatory Changes	  PAGEREF _Toc174174501 \h  34  

  HYPERLINK \l "_Toc174174502"  Exhibit 7:  Number of NTNCWSs and CWSs
in 11 States that Favored 1 Sample Per Tap in Comments on Proposed Rule
plus Alaska	  PAGEREF _Toc174174502 \h  36  

  HYPERLINK \l "_Toc174174503"  Exhibit 8:  Number of Public Water
Systems with Fewer Than 5 Taps in 11 States	  PAGEREF _Toc174174503 \h 
37  

  HYPERLINK \l "_Toc174174504"  Exhibit 9: Summary of Estimated Direct
Costs to Systems and State/Primacy Agencies Associated with Regulatory
Change III.A	  PAGEREF _Toc174174504 \h  38  

  HYPERLINK \l "_Toc174174505"  Exhibit 10: Number of Systems Exceeding
Annually	  PAGEREF _Toc174174505 \h  40  

  HYPERLINK \l "_Toc174174506"  Exhibit 11: Summary of Estimated Direct
Costs to Systems and State/Primacy Agencies Associated with Regulatory
Change III.C	  PAGEREF _Toc174174506 \h  42  

  HYPERLINK \l "_Toc174174507"  Exhibit 12: Estimated Direct Costs to
Systems and State/Primacy Agencies Associated with Regulatory Change
III.D	  PAGEREF _Toc174174507 \h  46  

  HYPERLINK \l "_Toc174174508"  Exhibit 13: Summary of Direct Costs
Associated with Regulatory Change III.E	  PAGEREF _Toc174174508 \h  49  

  HYPERLINK \l "_Toc174174509"  Exhibit 14: Number of Systems Exceeding
Annually	  PAGEREF _Toc174174509 \h  50  

  HYPERLINK \l "_Toc174174510"  Exhibit 15: Summary of Direct Costs
Associated with Regulatory Change III.F(a)(1)	  PAGEREF _Toc174174510 \h
 51  

  HYPERLINK \l "_Toc174174511"  Exhibit 16: Summary of Direct Costs
Associated with Regulatory Change III.F(b)(1)	  PAGEREF _Toc174174511 \h
 52  

  HYPERLINK \l "_Toc174174512"  Exhibit 17: Assumptions Used to Derive
System Costs for III.F(b)(2)	  PAGEREF _Toc174174512 \h  54  

  HYPERLINK \l "_Toc174174513"  Exhibit 18: Summary of Cost Per System
for Activities III.F(b)(2)(i)-(viii)	  PAGEREF _Toc174174513 \h  55  

  HYPERLINK \l "_Toc174174514"  Exhibit 19: Summary of Direct Costs
Associated with Regulatory Change III.F(b)(2)	  PAGEREF _Toc174174514 \h
 55  

  HYPERLINK \l "_Toc174174515"  Exhibit 20: Summary of Direct Costs
Associated with Regulatory Change III.F(c)(1)	  PAGEREF _Toc174174515 \h
 56  

  HYPERLINK \l "_Toc174174516"  Exhibit 21: Summary of Direct Costs
Associated with Regulatory Change III.F(c)(2)	  PAGEREF _Toc174174516 \h
 57  

  HYPERLINK \l "_Toc174174517"  Exhibit 22: Summary of Direct Costs
Associated with Regulatory Change III.F(c)(3)	  PAGEREF _Toc174174517 \h
 58  

  HYPERLINK \l "_Toc174174518"  Exhibit 23: Summary of Direct Costs
Associated with Regulatory Change III.F(e)(1)	  PAGEREF _Toc174174518 \h
 60  

  HYPERLINK \l "_Toc174174519"  Exhibit 24: Summary of Direct Costs to
Systems Associated with Regulatory Change III.F	  PAGEREF _Toc174174519
\h  61  

  HYPERLINK \l "_Toc174174520"  Exhibit 25: Summary of Direct Costs to
States Associated with Regulatory Change III.F(7)	  PAGEREF
_Toc174174520 \h  62  

  HYPERLINK \l "_Toc174174521"  Exhibit 26: Summary of Direct Costs
Associated with Regulatory Change III.G	  PAGEREF _Toc174174521 \h  65  

  HYPERLINK \l "_Toc174174522"  Exhibit 27:  Summary of Annual Direct
Costs to Systems and States from Regulatory Changes	  PAGEREF
_Toc174174522 \h  66  

  HYPERLINK \l "_Toc174174523"  Exhibit 28: Summary of Direct Costs
Associated with One-Time Costs	  PAGEREF _Toc174174523 \h  68  

  HYPERLINK \l "_Toc174174524"  Exhibit 29: Summary of Preliminary Cost
and Health Risk Reduction Implications of the LCR Short Term Rule
Changes	  PAGEREF _Toc174174524 \h  70  

  HYPERLINK \l "_Toc174174525"  Exhibit 30: Summary of the Total Burden
and Costs from September 2007 through September 2010 for the Regulatory
Changes	  PAGEREF _Toc174174525 \h  75  

  HYPERLINK \l "_Toc174174526"  Exhibit 31: A Summary of the Burden and
Costs by Year for the Regulatory Changes – Lower Bound Estimate	 
PAGEREF _Toc174174526 \h  76  

  HYPERLINK \l "_Toc174174527"  Exhibit 32: A Summary of the Burden and
Costs by Year for the Regulatory Changes – Upper Bound Estimate	 
PAGEREF _Toc174174527 \h  76  

  HYPERLINK \l "_Toc174174528"  Exhibit 33: The Number of Small Systems
Affected by the Final Rule Changes	  PAGEREF _Toc174174528 \h  78  

  HYPERLINK \l "_Toc174174529"  Exhibit 34: The Number of Small Systems
Affected by Each Regulatory Change	  PAGEREF _Toc174174529 \h  78  

Exhibit 35: Average Annual Small System Costs by System Size Category	 
PAGEREF _Toc174174530 \h  81 

  HYPERLINK \l "_Toc174174531"  Exhibit 36: One-Time Small System Costs
by System Size Category	  PAGEREF _Toc174174531 \h  81  

 EXHIBIT 37: REVENUE ESTIMATES FOR SMALL SYSTEM SIZE CATEGORIES	       
                               82

EXHIBIT 38: AVERAGE COSTS PER SYSTEM AND PERCENTAGE OF REVENUE          
                            83

Economic and   SEQ CHAPTER \h \r 1 Supporting Analyses

 

Short Term Regulatory Changes to the Lead and Copper Rule

Executive Summary

	The Environmental Protection Agency (EPA) is making seven targeted
regulatory changes to the national primary drinking water regulations
(NPDWR) for lead and copper. The intended effect of these regulatory
changes is to strengthen the implementation of the Lead and Copper Rule
(LCR) in the areas of monitoring, customer awareness, and lead service
line replacement. Some of these changes clarify the intent of the LCR
for provisions that have generated questions. Other provisions
reconsider LCR requirements in light of recent experiences regarding
implementation of the rule. These changes are expected to ensure and
enhance more effective protection of public health through the reduction
of lead exposure. The changes included in today’s action do not affect
the lead or copper maximum contaminant level goals, the Action Levels,
or the basic regulatory requirements.

	This Economic Analysis describes the estimates of annual costs for the
seven regulatory changes to utilities and States, including costs
associated with administrative, monitoring, sampling, reporting, and
public notification activities. One-time, upfront costs of rule review
and rule implementation are also estimated. There are two types of
annual costs that may result from the rule changes – direct and
indirect. Direct costs are from those activities that are specified by
the rule change, such as costs for additional monitoring or distribution
of consumer notices. A second type of cost may also result when systems
and States use the information generated by directly–related rule
activities to modify or enhance practices to reduce lead levels. These
indirect costs, and related health risk reductions, are not quantified
for the purposes of this analysis, but are described qualitatively in
Section 5. Exhibit ES-1 summarizes the expected direct and indirect cost
impacts for the seven regulatory changes.

Exhibit ES-1: Summary of Direct and Indirect Implications of the LCR
Short Term Rule Changes

Rule Change #	Rule Change Description	Direct Cost Implications	Indirect
Cost and Health Risk Implications

III.A	Number of samples	Yes	Yes

III.B	Monitoring period	Unquantified	None

III.C	Reduced monitoring criteria	Yes	Yes

III.D	Advanced notification and approval 	Yes	Yes

III.E	Consumer notice of Lead results	Yes	Yes

III.F	Public Education	Yes	Yes

III.G	Reconsideration of lead service lines	Yes	Yes

	Six rule changes are expected to result in direct costs: Regulatory
Changes III.A, III.C, III.D, III.E, III.F, and III.G. For these
potential rule changes, costs could be incurred in the areas of system
reporting, tap water monitoring and public education for systems, and
State review and public education for States/Primacy Agencies. Exhibit
ES-2 summarizes the annual direct costs estimated for each rule change.
Exhibit ES-3 summarizes the one-time direct costs associated with
implementing the rule changes.

Exhibit ES-2:  Summary of Annual Direct Costs to Systems and States from
Regulatory Changes 

(4th Qtr 2006$)

Regulatory Change	Annual Direct Costs to Systems	Annual  Direct Costs to
States	Total Annual Direct Costs

	Reporting	Monitoring	Customer Notification	Total

III.A	-	-	-	-	-	-

III.B	-	-	-	-	-	-

III.C	$61,000	$2,635,000	-	$2,696,000	$82,000	$2,778,000

III.D Low

III.D High	$506,000

$765,000	-	-	$506,000

$765,000	$163,000

$348,000	$669,000

$1,113,000

III.E	$136,000	-	$1,112,000	$1,248,000	$163,000	$1,411,000

III.F	$34,000	-	$825,000	$859,000	$63,000	$922,000

III.G	-	$110,000	-	$110,000	-	$110,000

TOTAL Low

TOTAL High	$736,000

$995,000	$2,745,000	$1,938,000	$5,418,000

$5,677,000	$471,000

$657,000	$5,890,000

$6,335,000

Note:  Totals may not add due to rounding.

Exhibit ES-3: Summary of One-Time Direct Costs  

(4th Qtr 2006$)

One Time  Costs

Costs to Systems

Review & Communication	$10,971,000

	III.A	$104,000

Total System Costs	$11,075,000

Costs to State/Primacy Agencies

	Regulation Adoption 	$1,488,000

	III.A	$162,000

Total State Costs	$1,650,000

Note:  Totals may not add due to rounding.

With regards to potential benefits resulting from the changes, the
intent of this rulemaking is to improve implementation of the lead and
copper regulations by clarifying monitoring, reporting, and notification
requirements, and modifying the lead service line test-out procedure.
The revisions do not affect the action levels, treatment techniques such
as corrosion control requirements, or other provisions in the existing
rule that directly determine the degree to which the rule reduces risks
from lead and copper. 

However, the increase in administrative activities that will result from
the revisions will result in the generation of new information (e.g.,
more monitoring data, some of which may show exceedances), and may
prompt some systems or individuals to respond to this new information by
taking measures to abate lead and copper exposures and thus reduce the
associated risk. Also, the requirement that treatment changes be
approved by the primacy agency prior to implementation will provide an
additional opportunity to identify possible adverse impacts due to
treatment changes, which may lower the risk to consumers. Because the
precise impact of these revisions on the behavior of individuals and
systems is not known, EPA has not quantified the changes in health
benefits associated with these revisions. EPA does expect that overall
benefits from the LCR will increase, as a result of the indirect effect
of the revisions on the actions of individual consumers and systems.

1	Introduction

	This document presents an analysis of the costs and potential impacts
of the Short Term Regulatory Changes to the Lead and Copper Rule. 

	This section provides a summary of the regulatory changes in Section
1.1. Section 1.2 outlines the organization of this document.

1.1 Summary of Changes

	The seven targeted regulatory changes to the Lead and Copper Rule (LCR)
that are the focus this document are summarized below. 

Summary of Short Term Targeted Regulatory Changes

#	Revision	Purpose of Revision

Monitoring

III.A	Minimum number of samples required	To address confusion about
sample collection

III.B	Definitions for compliance and monitoring periods	To clarify when
compliance and monitoring periods begin and end

III.C	Reduced monitoring criteria	To prohibit systems that exceed the
lead Action Level from initiating or remaining on reduced monitoring
based solely on results of water quality parameter monitoring

Treatment Processes

III.D	Advanced notification and approval requirement for water systems
that intend to make any change in water treatment or add a new source of
water that could affect the system’s optimal corrosion control	To
require systems to obtain state approval to add a new source of water or
change a treatment process prior to implementation

Customer Awareness

III.E	Notification of sampling results	To require utilities to provide
sampling results to consumers who are occupants of homes or buildings
that are tested for lead and copper, as part of the utility’s
monitoring program

III.F	Public Education Requirements	To modify public education
requirements by changing the content of the message to be provided to
consumers, how the materials are delivered to consumers, and the
timeframe for delivery

Lead Service Line Replacement

III.G	Reconsideration of lead service lines deemed replaced through
testing	To require that systems reevaluate lead service lines classified
as “replaced” through testing if the system resumes a lead service
line replacement program

1.2		Summary of Differences With the EA for the Proposed Rule

	This EA reflects the final version of the Short Term Changes to the
Lead and Copper Rule.  In comparison with the EA that accompanied the
proposed Rule, the costs in the EA for the Final Rule have been updated
to reflect a 4th Quarter 2006 price level.  In addition, some burden and
cost estimates have been revised based on feedback received in comments
on the proposed Rule.  Finally, the burden and cost estimates for some
of the regulatory changes have been modified to reflect specific changes
to the requirements.  The differences between the Final Rule and the
proposed Rule are summarized in the Appendix L.

    

1.3		Document Organization

	The rest of this document is organized into the following sections:

Section 2 identifies public health concerns addressed by the rule and
provides a summary of the regulatory history of lead in drinking water,
including the recent review of national implementation of the LCR. It
also explains the statutory authority for promulgating the rule changes
and economic rationale for choosing a regulatory approach.

Section 3 describes the changes in greater detail and reviews
alternative approaches considered.

Section 4 presents an estimate of the direct costs of implementing the
rule changes to utilities and State/Primacy Agencies.

Section 5 discusses the potential indirect cost and health risk impacts
that may result from the rule changes.

Section 6 discusses analyses performed to evaluate the effects of the
rule as specified by various administrative requirements.

2	Need for the Rule

	The purpose of the Lead and Copper Rule (LCR) is to protect populations
from exposure to lead in drinking water to reduce potential health risks
associated with lead. Recent highly publicized incidences of elevated
drinking water lead levels prompted EPA to review and evaluate the
implementation and effectiveness of the LCR on a national basis. As a
result of this multi-part review EPA identified the targeted rule
changes that are the subject of this Economic Analysis. These targeted
changes are intended to strengthen the implementation of the LCR in the
areas of monitoring, customer awareness, and lead service line
replacement. Some of the changes clarify the intent of the LCR for
provisions that have generated questions. Other provisions reconsider
LCR requirements in light of recent experience. These changes are
expected to ensure and enhance more effective protection of public
health through the reduction in lead exposure.

	The following section more fully discusses the need for the targeted
rule changes by first summarizing the health effects associated with
exposure from lead to emphasize the on-going need for reducing that
exposure. Next, context on the regulatory history of the LCR is
provided. EPA’s recent review of the LCR that resulted in the
identification of the targeted rule changes (among other actions) is
described. The section concludes with a description of the regulatory
authority and economic rationale for the regulation.

2.1		Public Health Concerns Related to Lead and Copper Exposure 

		Although lead is a naturally occurring metal, the highest
concentrations of lead are a result of human activities (ATSDR, 1999).
For example, sources of lead include lead-based paint, contaminated
soil, contaminated water, lead crystal or lead-glazed pottery or
porcelain, and industrial processes burning lead-based materials. Lead
exposure can cause many serious health effects, especially for children.
For this reason, EPA places a high priority on reducing lead blood
levels (Grumbles, 2004). 

		Lead can enter the body if it swallowed or inhaled. If contaminated
food, drink, soil, lead-based paint chips, or other objects covered in
lead dust are ingested, lead will be delivered to the stomach. After
reaching the stomach, a small portion of lead will enter the
bloodstream, while the other portion will be excreted in urine or feces.
In general, a higher portion of lead will enter the bloodstream for
children than for adults (ATSDR, 1999). Once in the blood stream, lead
can be deposited in soft tissues, bones, and/or teeth. If lead particles
or dust are inhaled, lead will first enter the lungs and then be
delivered to the bloodstream. 

		Lead exposure can result in the following health effects: lead can
damage the brain and kidneys, cause infertility in both men and woman,
increase blood pressure in adults, and harm the nervous system causing
nerve disorders and muscle and joint pain. Life long exposure to lead
above the Maximum Contaminant Level (MCL) may lead to strokes and kidney
disease.

		Certain populations are at higher risk because they are exposed to
lead more often and/or because they are more sensitive to the same
exposure than an average individual. Children are more vulnerable to
lead exposure because they are both typically exposed to lead more often
and because they are more sensitive to lead. Children are more likely to
be exposed to lead since they often place their hands on many objects,
such as toys, which might be covered in lead dust, and then place their
hands in their mouths. Infants can also be exposed through an exposed
mother’s breast milk. Children are more sensitive to lead because
children’s bodies absorb more of the ingested lead than adults (ATSDR,
1999). In addition, lead exposure can result in greater health risks in
children as their nervous system is still developing. Health effects in
children may include delayed mental and physical development, decreased
IQ, and slight deficits in attention span, hearing, and learning
(Grumbles, 2004). During 1999-2000, approximately 2 percent of children
between the ages of 1 and 5 have blood levels that exceeded CDC’s
level of concern, 10 mg/dL (CDC, 2003).

		Reducing lead exposure for pregnant women is another primary concern
for EPA (Grumbles, 2004). If a mother is exposed to lead, that lead can
be passed on to the developing fetus. Because their nervous systems are
just beginning to develop, fetuses are especially vulnerable to lead
exposure. 

		The Maximum Contaminant Level Goal (MCLG) describes the lowest level
of exposure to a contaminant that does not cause any potential health
problems. EPA determined that the MCLG for lead should be zero, since
there is no known safe level of lead in blood (EPA, 2005). Thus, any
exposure to lead, at any concentration, is considered harmful,
especially for young children and pregnant women. 

		

		The rule changes are needed to continue the health protection afforded
by the LCR though more timely and useful information regarding lead
exposure. These changes will also promote effective implementation of
the LCR provisions that protect citizens from lead in drinking water. 

2.2		 Regulatory History

		The following section provides a chronology and overview of regulatory
actions affecting the permitable level of lead and copper in drinking
water. 

		Drinking Water Regulations Enacted Prior to 1991

		As required by the Safe Drinking Water Act (SDWA), EPA set the
National Interim Primary Drinking Water Regulation for lead in drinking
water to 50 parts per billion (ppb) in 1975. This standard was not
enforceable and did not require utilities to sample at taps to determine
if they were in compliance.

		To limit the amount of lead reaching customer’s taps, Amendments to
SDWA in 1986 banned the installation or repair of lead pipes, fixtures,
solders, and fluxes in any facility that provides water for human
consumption. As defined in section 1417 (d), “lead free” solders and
fluxes may not contain more than 0.2 percent lead and “lead free”
pipes, pipe fittings, and well pumps may not contain more than 8.0
percent lead. In addition, the 1986 SDWA Amendments directed EPA to
revise the regulations for lead and copper in drinking water. In
response to this directive, the Agency proposed revisions in 1988, and
issued the Lead and Copper Rule in 1991. 

		To limit lead exposure to one of the most sensitive populations,
children, the Lead Contamination Control Act (LCCA) in 1988 required
schools to test drinking water and recall drinking water coolers that
leached lead. Furthermore, the LCCA banned new drinking water coolers
with lead parts. 

		Lead and Copper Rule 1991

		On June 7, 1991, EPA promulgated the Lead and Copper Rule (56 FR
26460; LCR), which set the maximum contaminant level goals (MCLGs) and
national primary drinking water regulations (NPDWRs) for lead and
copper. The rule aimed to maximize human health protection by reducing
lead and copper levels at consumers’ taps as close to the MCLG, 0 for
lead and 1.3 ppm for copper, as is technologically possible. Since
limited technology and resources made the MCLG unfeasible, EPA set
Action Levels at 0.015 mg/L for lead and 1.3 mg/L for copper. Compliance
is based on the 90th percentile of tap water samples. 

		To reduce lead and copper concentrations below the Action Level, the
LCR specified that community water systems (CWSs) and non-transient
non-community water systems (NTNCWSs) must conduct periodic monitoring
at the tap and reduce water corrosivity, since corrosive water can
increase the amount of lead and copper that is leached from service
lines and plumbing materials made of lead and/or copper. The rule also
required the following.

Public notification when lead in treated drinking water exceed the lead
Action Level

Treatment of source water if it significantly contributed to high levels
of lead or copper

Replacement of lead service lines in the distribution system if lead
levels continued to exceed the Action Level

Implementation of this rule was phased in based on system size, whereby
the largest systems began monitoring in 1992, and the smallest systems
began monitoring in 1993. 

		Proposed Changes to the Lead and Copper Rule 1996

		On April 12, 1996, EPA published a set of proposed minor revisions to
improve implementation of the Lead and Copper Rule. Many of the changes
were based upon recommendations made by a work group composed of
Headquarters and Regional EPA staff, and State drinking water officials.
Other changes were a result of legal challenges to the 1991 Lead and
Copper Rule brought on by the American Water Works Association (AWWA)
and the Natural Resources Defense Council (NRDC).

		The goal of the proposed changes was to promote consistent, national
implementation of the LCR, and streamline and reduce reporting burden.
Proposed changes included optimizing corrosion control, streamlining
monitoring processes, guidance for site selection, requirements for
public education, guidance for analytical processes, and clarification
of reporting requirements. In addition, EPA requested comments on
paperwork burden reductions, many of which were previously suggested,
but EPA did not have sufficient time to consider for LCR 1991.

		The minor revisions to the LCR that were ultimately adopted are
discussed below under “Lead and Copper Rule Minor Revisions 2000.”

		Safe Drinking Water Act 1996

		The 1996 Amendments to SDWA added that “lead free” plumbing
fittings and fixtures must meet standards established under section
1417(e) (42 U.S.C. 300g–6(e)). Section 1417(e) of the SDWA says that
either a voluntary standard must be accepted within a year or EPA must
issue a regulation within two years. Furthermore, if a voluntary
standard is to be accepted, the Administrator must provide technical
assistance to a qualified third-party in the development of the
voluntary standard and associated testing protocols for examining lead
leaching from new plumbing fittings and fixtures.

		In response, EPA published in the Federal Register (FR Vol. 62, No.
163, 44684, Aug. 22, 1997) their view that NSF 61, Section 9 satisfies
the requirement of Section 1417(e). Specifically, EPA felt that NSF 61,
Section 9 is an established voluntary standard and therefore, the
obligation to issue a new regulation was not triggered. As a result, any
new plumbing fitting and fixtures must be NSF certified. 

		Lead and Copper Rule Minor Revisions 2000

		On January 12, 2000, EPA published final minor revisions to the Lead
and Copper Rule (LCRMR) based on the comments and discussions of the
proposed revisions in 1996. The minor revisions streamline requirements,
promote consistent national implementation, and in many cases, reduce
the burden for CWSs and NTNCWSs water systems. The changes fall into the
following categories: demonstration of optimal corrosion control, lead
service line replacement requirements, public education requirements,
monitoring requirements, analytical methods, reporting and record
keeping requirements, and special primacy considerations.

		EPA also accepted the definition of “lead free” as defined in the
SDWA.

		The LCRMR did not change the Action Levels, MCLGs, or the rule’s
basic treatment requirements. 

2.3		Comprehensive Review of the LCR

		The minor changes to the Lead and Copper Rule described in this
document were identified through a comprehensive national review of
compliance and implementation of the Lead and Copper Rule. The review
was initiated in response to high profile Action Level exceedances
experienced by the District of Columbia Water and Sewer Authority (DC
WASA). The purpose of the review was to answer three questions with
regards to lead in drinking water:

Is this a national problem? Does a large percent of the population
receive water that exceeds the lead Action Level? Do a large number of
systems fail to meet the lead Action Level?

 

How well has the rule worked to reduce lead levels in systems over the
past 12 years, particularly in systems that had demonstrated high lead
levels in the initial rounds of sampling? 

Is the rule being effectively implemented today, particularly with
respect to monitoring and public education requirements? 

		The comprehensive review consisted of several elements, including a
series of workshops designed to elicit issues, comments, and suggestions
from stakeholders on particular topics, a review of data to evaluate the
effectiveness of the rule, and a review of LCR implementation by States
and utilities. The following section summarizes the DC WASA situation
that prompted the comprehensive review, describes in greater detail the
elements of the review, and presents EPA’s findings and next steps
resulting from the review.

		DC WASA’s Experience with Elevated Lead Levels in Drinking Water

		DC WASA is a utility that distributes drinking water to over 500,000
residential, commercial, and governmental customers in the District of
Columbia. The water that DC WASA distributes is purchased from and
treated by the Washington Aqueduct, a division of the US Army Corps of
Engineers.  

		From 1994 through 1999, DCWASA met the Action Level for lead under the
LCR and went on reduced monitoring. In August 2002, DCWASA reported to
EPA that the 90th percentile of 53 tap water samples for the compliance
period of July 1, 2001- June 30, 2002 exceeded the Action Level of 15
ppb, at a value of 75 ppb. Subsequent tap sampling also indicated Action
Level exceedances for the period of January - June of 2003 (40 ppb 90th
percentile from 104 samples) and July - December of 2003 (63 ppb 90th
percentile from 108 samples). As per the LCR, the Action Level
exceedances triggered DC WASA to undertake tap monitoring on a regular
(i.e., not reduced) schedule, public education, and lead service line
replacement.

		Local media coverage of the exceedances and the results of lead
service line testing elevated the visibility of DC WASA’s lead levels.
Multiple hearings were conducted before House and Senate committees in
2004 and 2005. EPA conducted a compliance audit that resulted in an
Administrative Order that detailed alleged weaknesses in DC WASA’s
implementation of the LCR including the following.

	Failure to take samples within the monitoring period

	Failure to conduct follow-up monitoring of partially replaced lead
service lines

	Failure to comply with requirements for public service announcements

	Not using required language in written materials provided to customers

	Failure to report samples and Action Level exceedance

	Failure to perform required activities following exceedance of the Lead
Action Level in the July 2000 - June 2001 monitoring period

	Failure to report noncompliance 

		DC WASA, in coordination with EPA, the Corps of Engineers, and other
groups, implemented numerous measures to address the high lead levels,
including adding orthophosphate as a corrosion control treatment,
replacing lead service lines, and conducting sampling and research.
Early results seem to indicate the effectiveness of orthophosphate in
reducing lead levels.  Preliminary analyses from an ongoing technical
review suggest potential causes of the elevated lead levels including
the following.

	Conversion from free chlorine to chloramines for final disinfection

 

	Detachment of lead particles from piping systems

	Galvanic corrosion of lead service lines

	Grounding currents that affect corrosion of lead bearing components

	City-Wide meter replacement program

	Distribution system pH variations

	Drought conditions and resulting effects on corrosivity of DCWASA water

		With regards to the implementation of the LCR, the DC WASA experience
highlights several areas in which the LCR could be improved, including
monitoring after lead service line replacement, defining compliance and
monitoring periods, and the impact of treatment changes.

Workshops on Lead in Drinking Water

		EPA held five workshops in 2004-2005 to elicit issues and suggestions
from stakeholders on various topics related to lead in drinking water. 

	Simultaneous Compliance, May 2004, St. Louis, MO: Expert participants
from utilities, academia, state governments, and other stakeholder
groups identified issues, proposed solutions, and identified information
gaps with respect to simultaneous compliance with the LCR and other
rules such as the Total Coliform Rule, the Surface Water Treatment
Rules, and the Disinfection Byproducts Rules. Issues and suggestions
were developed for four topic areas: coagulation impacts on corrosion
control; impacts of disinfectant changes on corrosion control; corrosion
inhibitor; and distribution system management. Among the issues
identified by the group were information gaps on impacts of treatment
changes under various water quality conditions/chemistries and the need
for additional guidance on a variety of topics.

	Sampling Protocols, May 2004, St. Louis, MO: Expert participants from
utilities, academia, state governments, and other stakeholder groups
identified issues, proposed solutions, and identified information gaps
with respect monitoring and sampling under the LCR. Topic areas included
sampling frequency and triggers; sampling site selection/location;
sampling protocol; and sampling of water quality parameters. The issues
included sampling after treatment changes and Action Level exceedances
and the re-examination of flushing instructions.

	Public Education, September 2004, Philadelphia, PA: Expert participants
from utilities, governments, consumer and environmental groups, and
other stakeholder groups discussed the public education requirements
under the lead and copper rule, drinking water risk communication, and
effective communication with the public. Participants suggested ways to
improve risk communication to the public through establishing
partnerships with health departments and other groups, refining the
message content, improving delivery of the message, and spending more
time planning and evaluating the effectiveness of the risk
communication. 

	Lead Service Line Replacement, October 2004, Atlanta, GA:  Expert
participants from utilities, academia, state governments, and other
stakeholder groups discussed the challenges and problems encountered by
the participants in implementing lead service line replacement, as well
as strategies and solutions for overcoming those difficulties. Specific
topic areas addressed included monitoring, customer communications,
replacement technologies, and managing inventory. Continued sampling
after lead service line replacement and the need to notify customers of
testing results were mentioned during the discussions.

	Lead in Plumbing, July 2005, Washington, DC: Expert participants from
utilities, academia, state governments, and other stakeholder groups
discussed lead in plumbing fittings and fixtures. Topic areas included
NSF standards and testing protocols, alternative materials,
national/state/local/industry/consumer practices, and miscellaneous
issues.

Review of Data to Evaluate Effectiveness of Rule

		EPA undertook a review of the lead levels in drinking water systems
serving more than 3,300 as reported in the Safe Drinking Water
Information System/Federal Version (SDWIS/FED). Since 2002, States have
been required to report to SDWIS the 90th percentile lead concentrations
for systems serving more than 3,300. At the start of the review,
SDWIS/FED had data for only 23 percent of these systems. EPA worked with
States to expedite entry of the 90th percentile lead data. The effort
was successful, with data available for 97 percent of large systems and
91 percent of medium systems as of June 1, 2004.

		The following exhibits summarize the data on medium and large public
water systems exceeding the Action Level from SDWIS/FED as of January
27, 2005.

Exhibit 1: Systems Exceeding the Lead Action Level Since 2003

	Small	Medium	Large	Total

Number of systems above Action Level	884	97	14	995

All systems with data	64,382	7,388	819	72,589

% all systems with results above the Action Level	1.4%	1.3%	1.7%	1.4%

Source: For medium and large systems, January 2005 Summary of Lead
Action Level,   HYPERLINK
"http://www.epa.gov/safewater/lcrmr/lead_data.html" 
http://www.epa.gov/safewater/lcrmr/lead_data.html ; for small systems,
Summary, Lead Action Level exceedances for public water systems subject
to the Lead and Copper Rule (For data through September 13, 2004).

Exhibit 2: Systems Exceeding the Lead Action Level Since 2000

	Small	Medium	Large	Total

Number of systems above Action Level	2,663	305	37	3,005

Systems with monitoring results since 2000	N/A	7,388	819	8,207

% of Systems with monitoring results since 2000 over AL	N/A	4.1%	4.5%
4.2%

Source: For medium and large systems, January 2005 Summary of Lead
Action Level,   HYPERLINK
"http://www.epa.gov/safewater/lcrmr/lead_data.html" 
http://www.epa.gov/safewater/lcrmr/lead_data.html ; for small systems,
Summary, Lead Action Level exceedances for public water systems subject
to the Lead and Copper Rule (For data through September 13, 2004).

		Based on the data, 95.8 percent of medium and large systems reporting
data since 2000 have 90th percentile values below the Action Level.
Since 2003, it appears that number is slightly higher, with 96.9 percent
of medium and large systems under the Action Level. EPA concluded from
this data: “There does not appear to be a widespread problem with
elevated lead levels across the country comparable to that currently
being observed in the District of Columbia.” 

		

		EPA also compared Action Level exceedances for 166 large systems
serving over 50,000 from immediately after the adoption of the LCR
(1992/1993) to the current monitoring results (2000-2004), summarized in
Exhibit 3. In 1992/1993, all 166 of these systems exceeded the Action
Level. In 2000-2004, only 15 of these systems had 90th percentiles that
exceeded the Action Level, “...demonstrating that corrosion control
efforts taken by the utilities have largely been effective in
controlling lead levels.” 

Exhibit 3: Lead 90th Percentile Levels for 166 Large Water Utilities -
Then and Now

			Source:
http://www.epa.gov/safewater/lcrmr/reductionplan_comparison.html

		In 2004, EPA carried out a review of the implementation of LCR
requirements by States. EPA asked State programs, who have primary
oversight responsibility, a number of questions about how they implement
different aspects of the LCR. The questions were centered on the
following general categories: sampling issues, calculation of the 90th
percentile value, treatment issues, lead service line replacement,
public education and enforcement. 

		Generally, the State responses to the survey indicate that the States
are following the minimum state requirements of the LCR. However, the
information provided to EPA indicates that many States may not be taking
full advantage of the opportunities to oversee implementation of the
rule. Also, the States’ responses did highlight a few areas in which
there is some confusion about the requirements of the rule as well as
areas in which some States are going above and beyond the minimum
obligations.

		Drinking Water Lead Reduction Plan

		As a result of the previous activities, EPA determined that the
current approach of the LCR has been effective in reducing drinking
water lead levels in the nation’s public water systems and that there
does not appear to be a widespread problem associated with high lead
levels in drinking water. However, EPA identified opportunities to
improve and clarify specific areas of the LCR and guidance materials.
The seven targeted rule changes that are the subject of this document
are key elements of the Drinking Water Lead Reduction Plan.

		It should be noted that EPA has also identified a number of issues
that require longer-term consideration that will continue to be reviewed
as part of potential, more comprehensive revisions to the rule or
guidance. In many cases, these issues require additional data
collection, research, and analysis to fill critical data gaps. Also,
some issues require full stakeholder involvement to support decisions.
Issues that are the subject of longer-term consideration include the
following.

Requirements for consecutive systems

Broader revisions to monitoring and lead service line replacement
requirements

Revision to lead content in plumbing fittings and fixture requirements

Short-term Regulatory Revisions and Clarifications to the Lead and
Copper Rule Workgroup

	In May 2005, EPA formed a work group to consider issues related to the
regulatory changes, called the Short-term Regulatory Revisions and
Clarifications to The Lead & Copper Rule Workgroup (LCRSTR Workgroup).
The LCRSTR Workgroup included EPA staff from a variety of Headquarters
and Regional offices, as well as representatives from State drinking
water lead programs. The LCRSTR Workgroup identified alternatives,
drafted regulatory language, and discussed issues related to the
changes.

National Drinking Water Advisory Committee Working Group on Public
Education Requirements of the Lead and Copper Rule

		

As part of the review of the LCR, EPA identified a number of issues
relating to the public education requirements of the LCR. In order to
address these concerns, the National Drinking Water Advisory Council
(NDWAC), EPA’s advisory body on the Safe Drinking Water Act, formed a
working group to consider possible revisions to the public education
requirements.   SEQ CHAPTER \h \r 1 The charge for the NDWAC Working
Group was to 1) review the current public education requirements for
lead in drinking water to make recommendations for improvements; 2)
develop recommended revised language for communicating to the public the
risk of lead in drinking water and how affected persons should respond;
and 3) review and make recommendations for changes to the means of
delivery of lead information to the public. 

The NDWAC Working Group met in person four times between October 2005
and April 2006. The Working Group was comprised of 16 individuals
representing an array of backgrounds and perspectives. Collectively,
these individuals brought into the discussion the perspectives of State
drinking water agencies, environmental and consumer groups, drinking
water utilities, small system advocates, State health officials, and
risk communication experts. The recommendations from the NDWAC Working
Group form the basis of the regulatory changes on public education
(III.F).	

2.4 	Rationale for the Regulation

		This section discusses the statutory authority of EPA to regulate lead
in drinking water and the economic rationale for choosing a regulatory
approach.

		EPA derives its statutory authority to regulate contaminants in
drinking water through the Safe Drinking Water Act. Section 1412(b) (1)
(A) of the SDWA requires EPA to establish National Primary Drinking
Water Regulations for contaminants that may have an adverse public
health effect; that are known to occur or that present a substantial
likelihood of occurring once in public water systems (PWSs), at a
frequency and level of public concern; and that present a meaningful
opportunity for health risk reduction for persons served by PWSs.

		This section addresses the economic rationale for choosing a
regulatory approach as described in Executive Order Number 12866,
Regulatory Planning and Review (USEPA

1993). OMB circular A-4 notes that the rationale for regulation is to
correct market failure or other social purposes: “The major types of
market failure include: externality, market power, and inadequate or
asymmetric information. Correcting market failures is a reason for
regulation, but it is not the only reason. Other possible justifications
include improving the functioning of government, removing distributional
unfairness, or promoting privacy and personal freedom.”

		Several of the rule changes correct inadequate or asymmetric
information. For example, regulatory change III.E requires that tap
monitoring results be provided to consumers, correcting asymmetric
information. Regulatory change III.D changes the timing of information
provision to States, again correcting asymmetric information. Additional
information is gathered under regulatory changes III.D and III.G,
correcting inadequate information. Regulatory change III.F provides for
the development of better information and the more effective
distribution of information, thereby also correcting a situation of
inadequate information.

		The other regulatory changes clarify the intent of the LCR, leading to
more effective implementation of the rule thereby improving the
functioning of government.

3	Regulatory Changes and Alternatives Considered

3.1 	Regulatory change III.A - Minimum number of samples required 

		Description of Regulatory Change

		EPA is clarifying the minimum sampling requirement for small water
systems that have fewer than five taps by making revisions to § 141.86
(c).   These revisions include a clarification that the term “taps”
means “taps that can be used for human consumption”, as opposed to
taps not used for human consumption such as hose bibs or at utility
sinks.  In addition, the revisions clarify what a system must do to meet
the minimum number of samples requirement (five), when there are fewer
than five taps available for sampling.  In this situation, those water
systems must sample all taps at least once and take repeat samples on
different days until five samples are obtained.  

		EPA  is adding a provision to § 141.86 (c) that gives States the
discretion to allow  public water systems with fewer than five taps to
collect one sample per tap that can be used for human  consumption.  The
requirement is not mandatory and NTNCWSs and CWSs that qualify must make
a request to the State in writing and must be approved by the State in
writing or by onsite verification.  Under this alternate sampling
schedule, the sample with the highest test result will be compared to
the Action Level to determine compliance.  If any sample result is above
the Action Level, it will serve as the system’s 90th percentile value.
 EPA is adding regulatory text to §141.80 to describe this new
compliance determination.  The new sampling schedule is also applicable
for NTNCWSs and CWSs that are on reduced monitoring and EPA is adding a
provision to §141.86 (d)(4)(i) for those systems.  The provision allows
the water system to reduce sampling frequency to once per year, but in
no case can the number of samples required be reduced below the minimum
of one sample per tap that can be used for human consumption.

		Rationale for Regulatory Change

		In the original Lead and Copper Rule of 1991, the term “site” is
used to refer to the number of samples collected, and there has been
confusion as to whether “site” refers to taps or physical locations.
 EPA is clarifying that sampling “sites” refer to “taps that can
be used for human consumption”. The phrase “that can be used for
human consumption” is being added to the regulations to ensure that
samples are taken from taps which would pose the highest risk for
exposure to lead, rather than from taps that are not frequently used for
human consumption. 

  

		EPA is making clarifications for NTNCWSs and CWSs with fewer than five
taps that can be used for human consumption.  In the proposal for this
rule, EPA maintained that systems must take a minimum of five samples in
order to adequately capture the variability of lead levels and that it
was more cost effective for small systems to take more samples than
install corrosion control or source treatment based on a small pool of
samples taken.  EPA is maintaining that systems must take a minimum of
five samples as part of today’s rule, however, EPA is also giving
States the discretion to offer the alternative sampling requirement of
sampling 100 percent of taps that can be used for human consumption to
water systems with fewer than five taps.  This alternative sampling
schedule alleviates any cost burden for systems  associated with taking
repeat samples and is also health protective because it does not allow
water systems to ignore a potential problem by taking repeat samples at
taps that have low lead results when they get  a high sample result 
Under the alternative sampling provision, systems would compare the
sample with the highest result to the Action Level to determine if
compliance actions, such as public education, corrosion control
treatment installation, and/or lead service line replacement, are
required.

		Alternatives Considered

Several alternative approaches were discussed by the Short-term
Regulatory Revisions and Clarifications to The Lead & Copper Rule
Workgroup (LCRSTR Workgroup). These approaches included retaining the 5
sample minimum requirement for systems, but allowing States the option
to reduce the number of samples to one per tap if the history of data
collected at the system demonstrates that levels have always been below
the Action Level with little to no variability.

3.2 	Regulatory change III.B - Definitions for compliance and
monitoring periods 

		Description of Regulatory Change 

	EPA is proposing to clarify the terms “compliance period” and
“monitoring period” for purposes of the LCR. The term “compliance
period” shall be as defined in Section 141.2 as a three-year calendar
year period within a nine-year compliance cycle. The term “monitoring
period” will refer to the specific period within the compliance period
in which a water system must perform the requirement (e.g.,
June-September).     

	

		Rationale for Regulatory Change

	This change is intended to clarify when systems are required to conduct
routine monitoring under reduced schedules and when they must begin
actions (i.e., corrosion control, public education, lead service line
replacement) to remedy a lead Action Level exceedance.	

	For systems on reduced monitoring, they must monitor either once during
each calendar year or once during each three-year compliance period. The
monitoring period is from June to September or some other four-month
period during normal operation where the highest lead levels are most
likely to occur. This change would clarify that a system that exceeds
the Action Level would be determined to be doing so as of the date on
which the monitoring period ended (e.g., on September 30). 

	This change would also require, for systems on triennial monitoring,
samples be taken during four consecutive months within the compliance
period, not over multiple years. These systems must also conduct their
monitoring every three years.

		

		Alternatives Considered 

		The Short-term Regulatory Revisions and Clarifications to The Lead &
Copper Rule Workgroup considered alternatives for defining the term
compliance period.



3.3 	Regulatory change III.C - Reduced monitoring criteria

		Description of Regulatory Change 

	Under the current rule language, systems are eligible for reduced
monitoring based on certain criteria. For small systems, these criteria
include having lead and copper levels below both Action Levels for two
consecutive monitoring periods. For all systems, the criteria include
meeting the State-designated water quality parameters with State
approval, but without meeting either the lead or copper Action Level.
The rule change specifies that if a system on reduced monitoring exceeds
the lead Action Level, the system must revert to the regular monitoring
schedule for lead tap sampling. 

		Rationale for Regulatory Change

		Monitoring lead levels at the tap is particularly critical for systems
that are exceeding the Action Level. These systems need frequent data on
the levels of lead corrosion so that they can evaluate the effectiveness
of any modifications to corrosion control treatment they may be
attempting, and to better inform their consumers of the effectiveness of
the system(s efforts to reduce lead levels.

		Alternatives Considered 

		The LCRSTR Workgroup and EPA considered including meeting the copper
Action Level for reduced monitoring under all circumstances (i.e.,
systems meeting water quality parameter requirements) as part of this
rule change. However, since the current rule does not contain additional
requirements if a copper Action Level is exceeded (such as public
education), EPA determined that copper issues will be considered as part
of longer term revisions to the rule. 

3.4 	Regulatory change III.D - Advanced notification and approval
requirement 

		Description of Regulatory Change 

		Under the current rule, Section 141.90(a) (3) requires that systems
deemed to have optimized corrosion control under §141.81(b) (3),
systems subject to reduced monitoring pursuant to §141.86(d) (4), or
systems subject to a monitoring waiver pursuant to §141.86(g) must
notify States no later than 60 days after of a treatment change or the
addition of a new source. The rule modification requires that these
systems notify States of any long-term change to be made in water
treatment process or additions of new sources in advance and the States
determine when and if these changes may be made through a formal review
and approval process. This gives systems the opportunity to consult with
their States as much as they want and to take other measures necessary
to avoid problems with corrosion. It also allows States to design
monitoring programs upfront or require additional actions for the
systems under those situations when it is necessary to ensure that
corrosion control is being maintained adequately after the change has
been made.

		Rationale for Regulatory Change

		EPA proposed that systems be required to provide advanced notification
of any change in treatment or addition of a new source and receive
approval from the State prior to making the change instead of the
existing requirement that the system had to notify the State within 60
days of making a change.  The final rule requires systems to provide
advanced notification of any change in treatment that has long term
impacts or addition of a new source and receive approval from the State
before implementing the change.  When water systems make changes to
their treatment process with long term impacts or add a new source of
water, there can be unintentional effects on the system’s optimal
corrosion control.  EPA believes that State review and approval of
changes in long-term treatment or addition of a new source will provide
an opportunity to minimize any potential impacts on optimal corrosion
control.  EPA has narrowed the scope of this provision in the final rule
to only long-term changes in treatment.  Long-term treatment changes
include the addition of a new treatment process or modification of an
existing treatment process.  Modifications include switching secondary
disinfectants, switching coagulants (e.g., alum to ferric chloride), and
switching corrosion inhibitor products (e.g., orthophosphate to blended
phosphate).  Long-term changes can include dose changes to existing
chemicals if the system is planning long-term changes to its finished
water pH or residual inhibitor concentration.  Long-term treatment
changes would not include chemical dose fluctuations associated with
daily raw water quality changes.

		Alternatives Considered 

		The LCRSTR Workgroup considered various lengths for the time period
before a change that notification had to take place, such as at least 60
days. However, limiting notification to 60 days prior to a treatment
change could be too short for some major changes. Leaving the States
flexibility to decide on a timeframe through a review and approval
process would alleviate such potentially unnecessary burdens.

	

		In addition, some Workgroup members believe that source changes should
be considered in addition to new sources for review and approval. This
may cause additional burden if some States and systems do not consider
source adjustments as new sources. 

3.5 	Regulatory change III.E - Requirement to provide sampling results
to consumers 

		Description of Regulatory Change 

		Systems take tap samples to test for lead for several purposes, most
notably to calculate compliance with the Action Level. The purpose of
this change in rule language is to add the requirement systems provide
consumers (owners and occupants) with the tap monitoring results for
samples taken for routine lead monitoring. The change modifies Sections
141.80(g) and 141.85, and adds a new Section 41.85(e) on the
notification of results. This new section specifies the timing (within
30 days of learning of the results), the content of the notification,
and the method of delivery for the notification.  EPA is also adding a
reporting requirement to §141.90(f) for systems to certify they have
completed this new consumer notification requirement.

		Rationale for Regulatory Change

	Community water systems must collect samples from between 5 and 100
households to calculate the 90th percentile for comparison to the LCR
Action Levels. Non community water systems (including some schools that
operate their own water system) must also collect samples. Currently,
systems are not required to notify the occupants of the lead levels
measured in samples taken from their specific taps. This rule change
would require systems to provide written notification to occupants of
the households within a specified period and to post or otherwise notify
occupants of non- residential buildings of the results of the lead
testing. This would include staff and parents of students for schools
that are tested as non-transient non-community water systems.   SEQ
CHAPTER \h \r 1   SEQ CHAPTER \h \r 1 While these tap samples are
primarily collected to evaluate the effectiveness of corrosion control
or to evaluate the corrosivity of the systems water, the results of the
lead monitoring can provide useful information to the occupants of the
location from which the samples were taken. In addition to the sample
results, the notifications will include an explanation of potential
health risks associated with lead in drinking water, methods for
reducing risks, contact information for the utility, and the 90th
percentile lead level for the most recently completed compliance
monitoring period reported to the State. Occupants may use this
information to inform any decisions they might make regarding taking
actions to reduce their lead exposure.

		Alternatives Considered 

		The Workgroup considered alternative time frames and including the
results of any testing the utility performs in homes and buildings other
than routine monitoring requirements. 

3.6 	Regulatory change III.F – Public education requirements 

		Description of Regulatory Change 

	The purpose of this regulatory change is to modify the public education
requirements of the Lead and Copper Rule (LCR) in the Code of Federal
Regulations §141.85. Water systems would still be required to deliver
public education materials after a lead Action Level exceedance.
However, the content of the message to be provided to consumers, how the
materials are delivered, and the timeframe for delivery will be
modified. The changes to the delivery requirements include additional
organizations that systems must partner with to disseminate the message
to at-risk populations as well as changes to the media used to
disseminate information to ensure water systems reach consumers when
there is an Action Level exceedance. EPA has also added a requirement
for systems to prepare and submit to States and letter certifying that
the public education activities after an Action Level exceedance have
taken place.  Specific changes include the following.

Changes to the mandatory text to written materials

The regulatory change requires systems that have a lead Action Level
exceedance to continue to deliver written materials to all customers as
well as a number of key organizations. However, the content of the
required written materials is modified to be much shorter and easier to
understand. The mandatory language addresses essential topics such as
the opening statement and health effects language. Community Water
Systems and Non- Transient Non-Community Water Systems are still
required to provide information on other topics, but the system may
either use EPA’s suggested language or their own words to explain
these topics. 

Changes to better reach at-risk populations

This regulatory change adds organizations to the list of recipients of
the public education materials in order to increase the likelihood that
the most vulnerable populations or their caregivers will receive the
information they need to reduce their exposure to lead in drinking
water. This includes requiring the system to send information to
licensed childcare centers, preschools and Obstetricians-Gynecologists
and Midwives. In addition, systems are required to include an
informational notice with the printed materials that they send to these
organizations to explain the importance of sharing this information with
their customers/patients. Also, systems are required to directly contact
(e.g., phone, in person, etc.) the local health agency rather than
simply delivering brochures to this organization. By directly contacting
the local health agency, utilities can request the health agency’s
support in disseminating information on lead in drinking water and the
steps that vulnerable populations can take to reduce their exposure.

Systems are also required to complete additional activities from a list
of options. The list of additional activities that systems can choose
from includes the following. 

Public Service Announcements

Paid advertisements such as newspaper or transit ads

Information displays in public areas such as grocery stores

Using the internet or email to disseminate information

Public meetings

Delivery to every household (not just bill paying customers)

Individual contact with customers such as door hangers

Provide materials directly to multi-family homes and institutions

Other methods approved by the primacy agency  

Systems serving more than 3,300 people must implement three additional
public education activities from the list and systems serving 3,300 or
fewer individuals must implement one additional activity. The system
must work in consultation with the State to ensure that the content of
each of these additional activities is appropriate. A system can choose
three items from one, two, or three of these general categories. For
instance, a system can do a series of paid advertisements if that is the
most effective way to reach the target populations in their community.

Changes to help systems maintain communication with consumers throughout
the exceedance

Under this change, systems include information in or on the water bill
no less than quarterly as long as there is an exceedance of the lead
Action Level, with a provision to allow systems to work with their
primacy agency to deliver this information in a different way if
necessary. In addition, systems with a population greater than 100,000
are required to put the public education information on their Web site
until the system tests below the lead Action Level.

Currently, systems that exceed the lead Action Level must issue a press
release. The regulatory change requires that systems distribute two
press releases per year in order to ensure systems are maintaining
communication with their customers. The systems must send the press
releases to the major newspapers and TV and radio stations which cover
the population served by the water system. States can waive the press
release requirement if there are no media outlets that cover the
population served by the system. In addition, the requirement for medium
and large systems to provide two Public Service Announcements (PSAs) per
year is removed. 

Changes to the required timing of completion of public education
requirements

While the revision requires systems to complete public education
activities within 60 days of the end of the monitoring period in which
the exceedance occurred, there is flexibility for the State to allow
longer for completion of these activities.  However, systems must
request and gain State approval on a case-by-case basis for extending
this deadline within the 60-day window. This ensures that the system and
the State begin public education actions to reduce exposure as soon as
possible, but allows these actions to continue past the 60-day timeframe
as needed for effective implementation.

Changes to Consumer Confidence Reports

		The regulatory change will require all community water systems include
information about the risks of lead in drinking water in their Consumer
Confidence Reports on a regular basis. 

		Rationale for Regulatory Change

The intention of changing the public education requirements of the LCR
is to improve compliance and ensure that consumers receive the
information they need to limit their exposure to lead in drinking water.
Because the sources of lead are frequently within the home and reduction
of lead in drinking water is the responsibility of both the public water
systems and the consumer, EPA wants to ensure that information is
delivered and that it is meaningful and useful to the consumer. 

As part of the review of LCR compliance issues, it was determined that
many water utilities did not conduct the required public education,
therefore the at-risk population did not get information they needed to
reduce their exposure from lead in drinking water. EPA believes these
changes better ensure at-risk populations receive information quickly
and are able to act to reduce their exposure. EPA also believes water
systems will be better able to comply with today’s requirements.

During EPA’s national review of the LCR, many stakeholders stated that
the public education requirements needed improvement. In September 2004,
EPA held an expert workshop to discuss the public education requirements
of the rule. A number of concerns were raised at this workshop about the
effectiveness of the existing public education language and
requirements. Workshop participants stated that the mandatory language
in the rule is too long, cumbersome, and complex to convey to the
general public an understanding of the risk posed by lead in drinking
water and an appropriate course of action. Public education must put the
risk in context and convey to the public the appropriate sense of
urgency for consumers to act to reduce exposure. In addition, workshop
members called for public education messages to be tailored to those who
are at highest risk for lead exposure. Many participants stated that the
mandatory language and delivery requirements in the current rule were
ineffective in providing useful and timely information to the public. 

In order to address these concerns, the National Drinking Water Advisory
Council (NDWAC), EPA’s advisory body on the Safe Drinking Water Act,
formed a working group to consider possible revisions to the public
education requirements. The NDWAC Working Group raised a number of
concerns with the public education requirements of the LCR that are
consistent with the concerns expressed at the 2004 workshop. The NDWAC
Working Group recommended that the rule be modified to better ensure
that information reaches the most vulnerable populations (e.g., pregnant
women, infants and young children) or their caregivers. They also
recommended changes to ensure that these consumers received information
in a more timely manner and continued to receive information throughout
any exceedance. They also recommended changes to ensure that the
information is easy to understand and effective in informing affected
consumers and encouraging parents or other caregivers to take actions to
reduce exposure of infants and children to lead. In addition, the NDWAC
Working Group recommended changes to make sure critical information
reaches not only bill paying customers, but those consumers who live in
apartments and other housing where residents do not receive bills. 

Finally, the NDWAC Working group was also concerned about the amount of
time it may take to test water, get back the results, calculate the 90th
percentile, and finally send out public education materials. They were
concerned that an individual could be drinking water with high lead
levels for months before knowing of the problem. As a result, they
recommended changes to increase the timeliness of public education on
lead in drinking water.

		The NDWAC recommendations are, in part, modeled after the public
education information under two existing EPA rules, the CCR and the
Public Notification Rule (40 CFR 141, Subpart Q). The NDWAC
recommendations form the basis for the changes to § 141.85 in this
rulemaking.

		Alternatives Considered 

	The NDWAC Working Group considered many alternatives during their
deliberations in the areas of mandatory language, delivery requirements
to make the public education program more effective, consultation
between systems and States, the timing of notification, and means for
targeting vulnerable populations.

3.7 	Regulatory change III.G - Reevaluation of Lead Service Lines
deemed replaced. 

		Description of Regulatory Change 

		Under the existing rule, systems that are replacing lead service lines
in response to an Action Level exceedance may sample lead levels from
lead lines. If the sampled lead levels from an individual service lines
is below the Action Level (15 ppb), that line would not have to be
physically replaced, but could be considered replaced towards meeting
the goal of 7 percent replacement. Since these “tested-out” lines
are considered replaced, they do not have to be re-evaluated if water
quality conditions or treatments change.

		The rule language requires that these “tested-out” lines be
re-evaluated if a system subsequently exceeds the Action Level and is
triggered back into further lead service line replacements. The
tested-out lines are put back into the inventory of lead service lines
and are then treated as any other line in the inventory, to be either
re-tested and “tested-out” or re-tested and replaced if the lead
levels for the line exceed the Action Level.

		Rationale for Regulatory Change

	This “test-out” provision was intended for service lines that are
not leaching high levels of lead. However, if a system has again
exceeded the Action Level, the previous service line sample may no
longer be representative of the lead concentrations being contributed by
the service line under the new conditions causing the Action Level
exceedance. For example, in the recent case of elevated lead levels in
the DC WASA system, the switch from chlorine to chloramines may have
changed the corrosiveness of the water in the distribution system,
potentially elevating lead levels, especially those from the service
lines. Service line samples collected under chlorination may not be
representative of service line samples under chloramination. Re-testing
is necessary to determine whether these lines are still contributing low
levels of lead under the new conditions. If not, then the line should be
considered for replacement along with the rest of the inventory of lead
service lines.

		Alternatives Considered 

		The workgroup did not consider any alternatives to this rule change.

4	Costs of Regulatory Changes

		This chapter describes the estimates of costs for the regulatory
changes to systems and State Primacy Agencies (States), including costs
associated with administrative, monitoring, sampling, reporting, and
public notification activities. There are two types of costs that may
result from the regulatory changes – direct and indirect. Direct costs
are costs for activities that are specified by the regulatory change,
such as costs for additional monitoring or distribution of consumer
notices. Indirect costs may also result when systems and States use the
information generated by the directly–related rule activities to
modify or enhance practices to reduce lead levels. These indirect costs,
and related health risk reductions, are not quantified for the purposes
of this analysis, but are described qualitatively in greater detail in
Section 5 of this document. The remainder of Section 4 focuses solely on
the estimation of direct costs. Exhibit 4 summarizes the expected direct
and indirect cost impacts for the seven regulatory changes.

Exhibit 4: Summary of Direct and Indirect Implications of the LCR Short
Term Regulatory Changes

Rule Change #	Rule Change Description	Direct Cost Implications	Indirect
Cost and Health Risk Implications

III.A	Number of samples	Yes	Yes

III.B	Monitoring period	Unquantified	None

III.C	Reduced monitoring criteria	Yes	Yes

III.D	Advanced notification and approval 	Yes	Yes

III.E	Consumer notice of Lead results	Yes	Yes

III.F	Public Education	Yes	Yes

III.G	Reconsideration of lead service lines	Yes	Yes

		The costs associated with the Lead and Copper Rule have been estimated
previously in several documents. Direct costs due to the 1991 Lead and
Copper Rule are presented in the Final Regulatory Impact Analysis of
National Primary Drinking Water Regulations for Lead and Copper, April
1991. This RIA estimates costs for monitoring, coping with source water
contamination, coping with lead leached from solder, coping with lead
leached from lead service lines (including public education, corrosion
control, and lead service line replacement), and State implementation
costs.

		EPA proposed and adopted minor changes to the LCR. The direct costs
for these minor changes are described in Regulatory Impact Analysis
Addendum: Proposed Changes to National Primary Drinking Water
Regulations for Lead and Copper, January 1996. This addendum estimates
changes to costs with respect to the April 1991 RIA, under the same cost
categories. An Information Collection Request was also prepared for the
minor rule changes, Information Collection Request: National Primary
Drinking Water Regulations For Lead and Copper, June 1999.

		The most recent cost estimates can found in the 2004 Information
Collection Request for Disinfectants/Disinfection Byproducts, Chemical,
and Radionuclides Rules, OMB Control Number: 2040-0204, EPA Tracking
Number: 1896.05. The 2004 ICR estimates administrative burden and costs
associated with the LCR for systems and States. Direct system costs are
estimated for community water systems and non-transient non-community
water systems to perform the following activities:

Conduct monitoring for water quality parameters 

Conduct tap sampling of lead levels for Action Level compliance

Review sample data, including the calculation of lead and copper 90th
percentile levels

Submit monitoring data and any other documents or reports to the State

Record and maintain information

The 2004 ICR also estimates burden and costs for systems that must
submit corrosion control studies, recommend and submit information
regarding the completion of corrosion control or source water treatment
installation, conduct public education, or conduct LSL monitoring,
notification, and replacement.

	In the 2004 ICR, for the LCR requirements to CWSs and NTNCWSs, the
average annual respondent burden is estimated at 1.72 million hours and
$57.9 million for reporting (including lead service line replacement
reporting), recordkeeping, and public education activities of the LCR.
For States, the annual burden incurred by primacy agencies for
activities associated with the lead and copper regulation is
approximately 0.21 million hours and $6.8 million. This estimate
includes costs for employing a corrosion control expert and costs to
review various letters and results submitted by water systems in
accordance with the LCR.

4.1		Overall Cost Methodologies and Assumptions

		

		As part of its comprehensive review of the Lead and Copper Rule, EPA
collected and analyzed new data on various aspects of LCR
implementation. When available, this new information is the first choice
source for use in estimating costs. Sources of the new information
include the following.

Medium and Large Public Water Systems Exceeding the Action Level Summary
from SDWIS/FED data as of January 27, 2005 provides up-to-date counts of
the number of medium and large systems that have exceeded the Action
Level since 2000 and 2003.

Summary, Lead Action Level exceedances for public water systems subject
to the Lead and Copper Rule (For data through September 13, 2004)
provides up-to-date counts of the number of small systems that have
exceeded the Action Level since 2000 and 2003.

State responses to EPA’s “ Survey of States Questions on State
Implementation of the Lead and Copper Rule” (July 2004) provides
information on the number of systems that are conducting lead service
line replacement under the LCR, the fraction of systems on reduced LCR
monitoring, and system practices with regard to notification of
customers of sampling results.

		If new information was not available about a cost item or assumption,
previous analyses of LCR requirements were reviewed to determine if a
suitable estimate was available. The 1991 RIA, the 1996 RIA Addendum,
and the various Information Collection Requests were all used as sources
of information and assumptions.

		In a limited number of instances, appropriate estimates were not
available either from new analyses or existing documents. For those cost
items, the best professional judgment used to derive estimates.

		For the regulatory changes that clarify rule language (III.B), the
costs associated with those activities may have already been included in
the original LCR cost estimates as presented in the 1991 RIA. In these
cases, costs for performing these activities are not included in this
analysis.

		Inventory of Systems

		The primary inventory of systems that will be impacted by the direct
costs of the regulatory changes was derived from a pull of data from the
SDWIS/FED system in the 4th quarter of 2004, available at   HYPERLINK
"http://www.epa.gov/safewater/data/pivottables.html" 
http://www.epa.gov/safewater/data/pivottables.html  and summarized in
FACTOIDS: Drinking Water and Ground Water Statistics for 2004.  The
number of systems covered by the LCR that result from the SDWIS/FED pull
for 2004 are summarized in Exhibit 5.

Exhibit 5: Number of Systems by Size Category and Type Subject to the
LCR

SDWIS/FED 2004 Data

 	CWS	NTNCWS	TOTAL LCR

<=100	13,766	9,548	23,314

101-500	16,240	6,997	23,237

501-1,000	5,914	1,925	7,839

1,001-3,300	8,298	795	9,093

3,301-10,000	4,707	96	4,803

10,001-25,000	2,107	7	2,114

25,001-50,000	950	6	956

50,001-75,000	343	1	344

75,001-100,000	141	0	141

100,001-500,000	322	0	322

500,001-1,000,000	32	0	32

>1,000,000	18	0	18

Grand Total	52,838	19,375	72,213

		Wage Rates

		Wage rates for systems were taken from the report Labor Costs for
National Drinking Water Rules prepared by Science Applications
International Corporation (SAIC) in October 2003 for EPA’s Office of
Ground Water and Drinking Water. Exhibits 20 and 21 of that report
summarize recommended average technical and managerial wage rates by
system size for EPA to use in cost analyses. These rates are updated to
4th quarter 2006 levels using the Employment Cost Index.  To represent
the composition of staff at PWSs of smaller sizes (e.g., systems serving
fewer than3,300 people), EPA uses only the updated technical rate. For
systems serving 3,300 or more people, EPA uses a ratio of 80 percent
technical labor to 20 percent managerial labor to arrive at a weighted
labor rate.  Appendix B presents the wage rates for systems used in the
cost analyses.

		Wage rates for States are based on information provided by the
Association of State Drinking Water Administrators (ASDWA) as presented
in the Information Collection Request for Contaminant Occurrence Data in
Support of EPA's Second Six Year Review of National Primary Drinking
Water Regulations (August 2006). Please refer to Appendix A for further
detail.

		

		Incremental Direct Costs Quantified

		As discussed earlier, Regulatory Changes III.A, III.C, III.D, III.E,
III.F, and III.G are expected to result in direct costs to States and
systems. For these potential regulatory changes, direct costs could be
incurred in the areas of system reporting, tap water monitoring and
public education for systems, and review and consultation for
States/Primacy Agencies. Exhibit 6 summarizes the direct cost categories
to be estimated for each regulatory change. The following sections
present either the rationale for why direct costs are not incurred, or
estimate of direct costs for each rule provision.

Exhibit 6:  Direct Costs Associated with Regulatory Changes

Regulatory 

Change	System Costs	State Costs

	System Reporting	Tap Water Monitoring	Customer Notification	Review and
Consultation

Regulatory Change III.A	X 

	X

Regulatory Change III.B	None – Clarifications of definitions with no
direct cost impact

Regulatory Change III.C	X	X

X

Regulatory Change III.D	X

	X

Regulatory Change III.E	X

X	X

Regulatory Change III.F	X

X	X

Regulatory Change III.G

X

4.2 	Direct Costs Associated with Regulatory Change III.A 

		Activities resulting from regulatory change

		Regulatory change III.A clarifies EPA’s intent that a minimum of 5
tap samples must be taken when conducting LCR compliance monitoring. If
a system has fewer than the minimum number of sites required for
sampling, then those systems will have to collect multiple samples on
different days from the same site so that the total number of samples
per monitoring period is 5. However, III.A gives States the discretion
to allow certain systems with fewer than 5 taps on a case by case basis
to take 1 sample per tap.  Under this alternate sampling schedule, the
sample with the highest test result will be compared to the action level
to determine compliance.  

		Public water systems with fewer than 5 taps that are in States that
allow 1 sample per tap will undertake a one time activity to document
the number of appropriate taps and communicate this information with the
State.  States that will allow 1 sample per tap will engage in a one
time effort to review, track, and respond to submittals from the systems
with fewer than 5 taps on the number of appropriate taps for future
sampling.

	Costs to systems 

	The systems that will incur costs under this regulatory change are
NTNCWSs and CWSs with fewer than 5 taps in States that allow 1 sample
per tap. The following data are used to estimate the number of systems
impacted by the regulatory change and related direct costs.

The number of NTNCWSs in States that will allow 1 sample per tap:  This
analysis assumes that the 11 States that commented favorably on the
option of allowing 1 sample per tap for NTNCWSs with fewer than 5 taps
will exercise their discretion under III.A and permit 1 sample per tap. 
Note that two States commented unfavorably on the option and it is
assumed States that did not comment at all would not allow the
alternative since the default requirement maintains a minimum of five
samples.  Exhibit 7 contains estimates of the number of NTNCWSs in these
11 States.

The number of CWSs with fewer than five taps in States that will allow 1
sample per tap:  This analysis assumes that the 11 States that commented
favorably on the option of NTNCWSs will also allow permit 1 sample per
tap for applicable CWSs.  In addition, the analysis assumes that Alaska
will exercise its discretion to allow 1 sample per tap for small CWSs
due to the presence of washeterias in the State.  This analysis assumes
that all CWSs with fewer than five taps are a portion of those that
serve 100 or fewer people since EPA believes that CWSs with fewer than 5
taps, even in the smallest system size category, are relatively unique
situations and do not occur frequently. Exhibit 7 contains estimates of
the number of CWSs serving 100 or fewer people in the 11 States plus
Alaska.

Exhibit 7:  Number of NTNCWSs and CWSs in 11 States that Favored 1
Sample Per Tap in Comments on Proposed Rule plus Alaska

11 States that Favored 1 Sample Per Tap In Comments to Proposed Rule, &
Alaska	Number of NTNCWSs By State 	Number of CWSs serving <101 by State

AK	N/A	341

IN	686	317

MI	1631	744

WI	907	592

IL	405	670

TX	785	2105

VT	234	319

UT	63	241

WA	315	1748

MD	573	327

MN	563	484

TN	46	151

Total	6208	8039

Source: SDWIS/FED data pull from the 4th quarter of 2004.

The fraction of NTNCWSs that have fewer than 5 taps:  No nationally
available data source provides information on the fraction of NTNCWSs
with fewer than 5 taps.  However, in their comments submitted on the
Draft LCRSTR, MI provided information that 53% of the NTNCWSs in MI had
fewer than 5 taps.  In the absence of other data, this analysis assumes
that 53% of the NTNCWSs in the 11 States have fewer than 5 taps. 
Exhibit 8 displays the calculation of the number of NTNCWSs with fewer
than 5 taps in the 11 States.

The fraction of CWSs serving <101 people that have fewer than 5 taps: As
stated above, EPA believes that CWSs with fewer than 5 taps, even in the
smallest system size category, are relatively unique situations and do
not occur frequently.  In the absence of any other data source, this
analysis assumes that 5% of CWSs serving <101 have fewer than 5 taps, as
displayed in Exhibit 8.

Exhibit 8:  Number of Public Water Systems with Fewer Than 5 Taps in 11
States 

11 States that Favored 1 Sample Per Tap In Comments to Proposed Rule	
Number of NTNCWSs By State 	Fraction of NTNCWSs with <5 Taps	Number of
NTNCWSs with <5 Taps	CWSs Serving <100 By State [1]	Percent of CWSs <100
With <5 taps [6]	Number of CWSs <100 With <5 taps

AK	N/A	N/A	N/A	341	5%	17

IN	686	53%	364	317	5%	16

MI	1631	53%	864	744	5%	37

WI	907	53%	481	592	5%	30

IL	405	53%	215	670	5%	34

TX	785	53%	416	2105	5%	105

VT	234	53%	124	319	5%	16

UT	63	53%	33	241	5%	12

WA	315	53%	167	1748	5%	87

MD	573	53%	304	327	5%	16

MN	563	53%	298	484	5%	24

TN	46	53%	24	151	5%	8

Total	6208	 	3290	8039	 	402

The labor and cost estimates per applicable system with <5 Taps: Based
on similar activities, it is estimated that systems will take 1 hour to
prepare a letter to States verifying the number of applicable taps for
lead and copper sampling, with a materials cost of $0.43 for postage and
supplies.  This analysis assumes that all systems that are eligible for
taking 1 sample per tap will request this option from States. 

The one-time direct costs to systems, summarized in Exhibit 9, are
estimated to be $104,000 including $102,500 in labor costs and $1,600 in
materials costs. Detailed estimates are provided in Appendix J. 

		Costs to States

Regulatory Change III.A will require State/Primacy agencies that
exercise their discretion and allow 1 sample per tap for applicable
systems with fewer than 5 taps to verify the appropriate number of taps
per system by reviewing the letters submitted by systems and responding
to systems. 

Estimates of state review burden are based on similar activities (such
as reviewing a letter reviewing tap monitoring events).  States are
estimated to take 1 hour to review and respond to the letter from
systems verifying the applicable number of taps for sampling.

The one-time direct costs to State/Primacy agencies is estimated to be
$162,000 ($160,700 in labor costs and $1,600 costs for postage and
supplies to mail the response letter to systems), as summarized in
Exhibit 9. Detailed estimates are included in Appendix J.

Exhibit 9: Summary of Estimated Direct Costs to Systems and
State/Primacy Agencies Associated with Regulatory Change III.A 

(4th Qtr 2006$)

One-Time Labor	One-Time Materials	Total One-Time Costs

Costs to Systems

Reporting	$102,500	$1,600	$104,000

Total System Costs	$102,500	$1,600	$104,000

Costs to State/Primacy Agencies

	Review Costs	$160,700	$1,600	$162,000

Total State Costs	$160,700	$1,600	$162,000

Note:  Totals may not add due to rounding.

4.3 Direct Costs Associated with Regulatory Change III.B

	Regulatory Change III.B clarifies the terms “monitoring period” and
“compliance period.” Based on the regulatory change, if a system
exceeds the lead or copper Action Level during a monitoring period, the
compliance calendar for required actions starts at the end of the
monitoring period, which for most systems would occur on September 30.
Under the previous regulatory language, systems were confused as to
whether compliance actions began at the end of that calendar year
(December 31) rather than the monitoring period (September 30). 

	As a result of the regulatory change, activities triggered by a lead or
copper Action Level exceedance could begin three months earlier (i.e.,
at the end of September instead of the end of December), but it is not
clear if activities would last any longer. The net result is a change in
the timing of activities, with a difference of three months having an
unclear impact on costs, although there may be health risk implications.

 

4.4 	Direct Costs Associated with Regulatory Change III.C

		Activities resulting from regulatory change

As a result of Regulatory Change III.C, utilities that are conducting
LCR compliance monitoring on a reduced monitoring schedule and that have
90th percentile LCR monitoring samples that exceed the lead Action Level
will be required to resume standard monitoring schedules for monitoring
lead at taps. In addition to monitoring activities, utilities will have
to meet reporting requirements to the State/Primacy agency.
State/Primacy agencies will be involved in review of utility monitoring
reports. Supporting calculations and information are included in
Appendix C.

		Costs to systems

	

	The systems that will incur direct costs under this regulatory change
are those systems that exceed the lead Action Level and that had been on
a reduced monitoring schedule. The following data are used to estimate
the number of systems impacted by the regulatory change and related
direct costs.

Number of systems exceeding the lead Action Level:  This analysis uses
the number of systems that have exceeded the lead Action Level since
2003 as an estimate of the number of systems that will exceed the lead
Action Level each year in the near future. Exhibit 10 contains estimates
of the number of systems exceeding the lead Action Level annually by
size category.

Exhibit 10: Number of Systems Exceeding Annually

System Size Category	# Systems that Exceed Lead AL Since 20031,2

<3.3K	884

3.3K-10K	55

10K-50K	41

50K-100K	7

>100K	7

Total	994

1. Data source: USEPA Survey of States - Questions on State
Implementation of Lead and Copper Rule. July 2004.

2. Data Source: www.epa.gov/safewater/lcrmr/lead-data.html, 8/30/05.

Percent of systems on reduced monitoring:  In their responses to the EPA
survey on LCR implementation, States provided estimates of the percent
of systems on reduced LCR monitoring (summarized in Appendix C-1). Based
on this data, 91 percent of systems are on a reduced schedule for LCR
lead and copper monitoring. In the absence of additional data, this
analysis assumes that systems that will exceed the lead Action Level are
on a reduced monitoring schedule at the same rate as all systems.
Therefore, we assume that 91 percent of the systems that exceed the lead
Action Level were on reduced monitoring and will therefore incur direct
costs due to regulatory change III.C. This assumption may be
conservative, because systems that are likely to have exceedances are
less likely to be on reduced monitoring.

Additional monitoring events: The frequency for monitoring on a standard
schedule under the LCR is once every 6 months. Reduced monitoring could
refer to either monitoring once every year or once every three years.
From the state responses to the survey, it is impossible to distinguish
the number of systems on a reduced monitoring schedule of once every
year from those monitoring once every three years. This analysis assumes
that all systems on reduced monitoring are on the triennial schedule, a
conservative assumption that might slightly over-estimate costs. Thus, a
system that was on reduced monitoring but is placed on a standard
monitoring schedule after a lead Action Level exceedance under
regulatory change III.C will incur an additional 5 monitoring events
over a 3 year period (6 monitoring events in three years under standard
monitoring instead of 1 monitoring event in three years under reduced
monitoring).

Tap samples per monitoring event: The number of samples collected in
each monitoring period will also change when the utility switches from
reduced monitoring to standard monitoring. The required number of
samples varies by system size, with the smallest systems (serving less
than or equal to 100 people) required to take 5 samples per monitoring
event under both standard and reduced monitoring, and the largest
systems (serving > 100,000 people) required to take 100 samples per
monitoring event under standard monitoring, and 50 samples per
monitoring event under reduced monitoring.

Labor and cost estimates per sample: Based on previous EPA documents,
the labor required to collect each lead and copper compliance tap sample
is estimated at 2.5 hours. The labor to analyze the sample for lead and
copper is estimated at 1 hour, with a material cost of $8.16 per sample
(also referred to as the materials cost). In addition, systems must
calculate their 90th percentile value to assess compliance and report
the monitoring and compliance results to the State. These activities are
estimated to require 1.5 to 2 hours per system, varying by system size,
with a materials cost of $0.39 for postage and $0.04 in materials. The
derivation of the labor and cost estimates relating to compliance
monitoring is detailed in Appendix C-2.

The direct Costs to systems, summarized in Exhibit 11, are estimated to
be $2,696,000 annually including $2,502,000 in labor costs and $194,000
in materials costs. Detailed estimates are provided in Appendices C-4
and C-5. 

		Costs to States

Regulatory Change III.C will require State/Primacy agencies to review
utility monitoring reports as a result of resuming standard monitoring
schedules. 

Estimates of state review burden are based on the 2004 ICR page H-12,
which estimates that a State takes 1 hour to review the letter
describing a tap monitoring event for each system. Additionally, States
will spend an additional 10 minutes to 1 hour checking the compliance
(90th percentile) calculations for each monitoring event. The materials
cost is limited to postage for letters sent to utilities regarding
review findings.

The direct costs to State/Primacy agencies is estimated to be $82,000
annually including $81,000 in labor costs and $1,000 in materials costs,
as summarized in Exhibit 11. Detailed estimates are included in Appendix
C-7. 

Exhibit 11: Summary of Estimated Direct Costs to Systems and
State/Primacy Agencies Associated with Regulatory Change III.C

(4th Qtr 2006$)

Annual Labor	Annual Materials	Total Annual

Costs to Systems

Reporting	$60,000	$1,000	$61,000

	Tap Monitoring	$2,442,000	$193,000	$2,635,000

Total System Costs	$2,502,000	$194,000	$2,696,000

Costs to State/Primacy Agencies

	Review Costs	$81,000	$1,000	$82,000

Total State Costs	$81,000	$1,000	$82,000

4.5 	Direct Costs Associated with Regulatory Change III.D

		Activities resulting from regulatory change

	Regulatory Change III.D revises the current 60-day notification
requirement, under which systems notify States about long-term changes
in treatment or additions of new sources that could cause problems with
optimal corrosion control. Rather than requiring systems to notify
States up to 60 days after treatment changes or source additions have
been made, systems now must notify the states in advance and the changes
must undergo a formal review and approval process by the State prior to
implementation. All States currently review treatment or source changes
within 60 days after the change.  However, some States are already
reviewing and issuing approval before such changes are made. The
activities associated with the formal review and approval process are a
new requirement for those States that do not currently have such a
review and approval process. System activities will include preparation
of a submittal to the State and coordination with the State/Primacy
agency during the review. State/Primacy agency activities will include
review of system data/reports and coordination with systems. 

		Costs to systems

	In order to estimate the cost of this provision to utilities,
information is needed on the number of systems that will change a
treatment or add a source annually, as well as the number of systems
that are located in States that already have a review and approval
requirement. Systems located in these States will not incur additional
costs under this provision.

States with review and approval process:  Many States already have a
review and approval process for treatment or source changes. As part of
the survey on LCR implementation, EPA asked States to respond to the
following question:  “How do systems notify the State of treatment
changes?  Does the State require that systems provide information about
potential effects of treatment changes on corrosion control?”  A
summary of State responses is provided in Appendix D-1. Based on the
State responses, 14 States explicitly replied that they currently have a
review and approval process for treatment changes. It should be noted
that another nine States mention a process that requires a permit for
treatment changes and eight States refer to submittal and review of
engineering plans for a change. Although not a review and approval
process focused specifically on the impact of a change on corrosion
control, the permitting and plan review processes may be comprehensive
enough that they consider corrosion issues. For the purposes of this
analysis, however, we base our estimates by excluding only the 14 States
that specifically consider corrosion issues, recognizing that other
States may also include corrosion issues in their review processes.

Number of systems in States without an existing review and approval
process:  Based on the characterization of the process for each State
and the number of systems in each State, the number of systems that are
not covered by an existing process and may therefore incur costs under
this regulatory change is estimated in Appendix D-1. Under the
alternative in which only the 14 States with explicit review and
approval are excluded from the count, 53,372 systems (of 72,213 CWSs and
NTNCWSs) may incur costs for the regulatory change. 

Fraction of systems that change treatment or add a source each year:
Treatment changes over the next several years are likely, as systems
will be faced with new regulatory requirements, including changes to
comply with the already promulgated Arsenic Rule and the upcoming Long
Term 2 Surface Water Treatment Rule and Stage 2
Disinfectants/Disinfection Byproducts Rule. Together, these regulatory
requirements are estimated to cause 9,243 systems to institute a
treatment change, although not all of these treatment changes will
affect corrosion control. Also the compliance periods for these
regulations varies. To account for these expected treatment changes, and
to account for treatment changes and source additions unrelated to the
Arsenic, LT2, and Stage 2 rules, EPA assumed (based on the projected
rule-related treatment changes and expert judgment) that approximately
20% of the systems affected by the LCR will institute a treatment change
in the next ten years. It is assumed that these changes occur uniformly
over that 10-year period, so that approximately one-tenth of these
systems (or 2 percent of the total) institute a treatment change or
source addition each year. Appendix D-2 provides additional detail.

Based on the 2 percent assumption, the analysis estimates that 1,067
(53,372 X .02) systems each year would report a treatment change or
source addition and incur costs in States currently not covered by an
explicit review and approval program.

 

System burden and activities: EPA anticipates that systems will incur
additional costs under this rule change as systems and States more
carefully review and consider possible corrosion impacts of treatment
changes or source additions. The activities and burden associated with
the review and approval process are expected to vary based on the size
and complexity of a system, and the nature of the change or source
addition. In the absence of information on the current prevalence of
these activities, EPA has used the best professional judgment to
estimate the range of potential activities and associated costs
resulting from the review and approval process. All systems, regardless
of size or complexity, are assumed to undertake additional activities
related to data collection and evaluation, preparation of a submittal to
the State, and coordination with the State. For small systems or systems
making relatively simple changes, considering the corrosion impacts of
the change may be a rather basic process of reviewing water quality data
and previous lead monitoring results. For these systems, additional
effort will be incurred by system staff in coordination with State
personnel to assemble water quality parameter and lead data and evaluate
the potential impacts.  EPA estimates the burden for this additional
effort at 7.5 hours per system, at an average cost of $231 per system. 
For larger or more complex systems making major treatment changes,
activities would be more extensive, including conducting engineering
studies to evaluate impacts on corrosion control. To some extent,
systems may already be conducting these studies, resulting in no net
cost due to the regulatory change.

The current LCR regulatory requirements on notification of treatment
changes cause a system burden of 0.5 hours per treatment change.
Therefore, the new system burden is expected to be 8 minus 0.5 hours or
7.5 hours per treatment change.   

Additional burden for engineering studies:  Based on best professional
judgment, EPA estimates that between 10 percent and 20 percent of medium
and large systems may incur the additional cost of $20,000 to conduct an
engineering study on corrosion impacts. The $20,000 estimate is based on
recent similar studies for medium-sized systems.

The direct costs to systems are estimated to range from $506,000 to
$765,000 annually. These direct costs are strictly labor costs; material
costs are expected to be negligible. Detailed estimates are provided in
Appendix D-3. 

		Costs to States

Those States that do not already have a review and approval process will
also incur additional costs due to regulatory change III.D. 

Activities that States will undertake include review of system data,
preparation of conclusions and letter to systems, and coordination with
utilities. The level of effort associated with these activities is
expected to vary based on the complexity of the change and the type of
submittal (amount and type of information). Based on best professional
judgment, State review could range from 4 hours to 8 hours.

The current LCR regulatory requirements on State review of treatment
changes entail a burden of 0.5 hours per review. Therefore, the new
State burden is expected to range from 3.5 to 7.5 hours per treatment
change. 

Based on the State responses on existing review and approval processes,
the analysis assumes that 14 States have existing processes (explicit
review and approval). The remaining States will incur costs under this
regulatory change.

The direct costs to State/Primacy agencies are estimated to range from
$163,000 to $348,000 annually. These direct costs are strictly labor
costs; material costs are expected to be negligible. Estimates are
summarized in Exhibit 9 and detailed in Appendix D-4.

Exhibit 12: Estimated Direct Costs to Systems and State/Primacy Agencies
Associated with Regulatory Change III.D

(4th Qtr 2006$)

Annual Costs

 Low End of Range (1)	Annual Costs– High End of Range (2)

Costs to Systems

	Reporting	$506,000	$765,000

Total System Costs	$506,000	$765,000

	Costs to State/Primacy Agencies

Review Costs	$163,000	$348,000

Total State Costs	$163,000	$348,000

(1) 10 percent medium and large systems conduct engineering study and 4
hours for State review

(2) 20 percent medium and large systems conduct engineering study and 8
hours for State review

 4.6 	Direct Costs Associated with Regulatory Change III.E

		Activities resulting from regulatory change

		Regulatory Change III.E will require systems to provide written
notification to each owner/occupant of the lead level found in the tap
sample collected for LCR compliance monitoring. Both CWSs and NTNCWSs
are required to provide notification on tap sampling results, but the
activities are expected to differ between the two types of systems. In
addition, systems are required to certify to States in a letter that the
notification activity has taken place.  Supporting calculations and
information regarding Costs to systems associated with this regulatory
change are included in Appendix E. 

		Costs to systems

		In order to estimate the additional direct costs associated with
regulatory change III.E, information is needed on the number of systems
that already notify customers of tap monitoring results and the burden
associated with notification activities.

Number of systems that already notify customers:  Based on feedback from
participants in workshops and interactions with States, some systems
already notify customers of monitoring results for their particular
establishments. These systems would not incur costs under the regulatory
change. This analysis uses information from the State survey to develop
an estimate of the number of systems that currently notify customers of
tap sampling results, as detailed in Appendix E-1. Of 72,213 CWS and
NTNCWSs (per 2004 SDWIS/Fed data) subject to the LCR, approximately 11
percent of these systems are estimated to already notify owner/occupants
as derived from USEPA’s Survey of States (July 2004). Therefore, this
regulatory change will apply to the remaining 89 percent of systems or
64,273 systems. 

Activities associated with notification: CWSs will prepare a customer
notification letter and mail letters to all owner/occupants for
residences where tap samples were collected. For NTNCWSs, the
notification burden will be different, and may consist of posting a
notice on community bulletin boards or web sites.

Activities associated with reporting to States:  CWSs and NTNCWSs will
prepare a letter to the State certifying that they have completed the
required notification activities. 

Burden and costs for CWSs: Labor costs are based on the labor required
to prepare a sample customer notification letter and mail letters to
customers. The system burden is estimated to be 1 hour per monitoring
event for systems serving <3,300 people and 1 hour per 20 sample letters
for systems serving more than 3,300 people. For example, systems serving
less than 3,300 people will prepare either 5 or 10 customer letters for
each monitoring event at an estimated time burden of 1 hour. Material
costs include paper, envelopes and postage, estimated at $0.43 per
customer letter.

Burden and costs for NTNCWSs:  Costs for NTNCWSs include the labor
required to prepare a consumer notice and post the notice. It is
estimated that all systems will spend 1 hour per monitoring event. It is
assumed that material costs are negligible for NTNCWSs.

Burden and costs for reporting:  Both CWSs and NTNCWSs will incur labor
to prepare a self-certification letter and submit the letter to the
State.  Based on a similar activity under the CCR, the labor to prepare
the self-certification letter is estimated at .12 hours per system (PWSS
ICR, 2040-0090, page B-5), with materials cost of $0.43 for postage and
supplies.

Frequency of monitoring and number of samples: Of the 64,273 systems
affected by this Regulatory Change, it is assumed that 91 percent of
systems are currently on a reduced monitoring schedule, and 9 percent
follow a standard monitoring schedule as documented in USEPA’s Survey
of States (July 2004). Although reduced monitoring can imply a 1 year, 3
year or 9 year monitoring frequency, a 3 year frequency is assumed for
all systems for use in this economic analysis. The number of samples
collected by each system is estimated based on sampling schedules
established in 40 CFR 141.86c for standard and reduced monitoring
according to population served. In addition, the number of increased
monitoring events that would result from Regulatory Change #III.C (1,692
additional monitoring events per year) are added to the total. 

		The direct costs to systems for compliance with Regulatory Change
#III.E are summarized in Exhibit 13 and estimated to be $1,248,000
annually including $1,098,000 in labor costs and $150,000 in material
costs. Detailed estimates are provided in Appendix E.

	

		Costs to States

		States will incur costs to review and track the self-certification
letters from systems.  Based on a similar activity for the CCR, this
analysis estimates that States will require 0.10 hours per system letter
(PWSS ICR, 2040-0090, page B-7).  The direct costs to States for review
under Regulatory Change #III.E are summarized in Exhibit 13 and
estimated to be $163,000 annually (all labor costs). Detailed estimates
are provided in Appendix E.

Exhibit 13: Summary of Direct Costs Associated with Regulatory Change
III.E

(4th Qtr 2006$)

Annual Labor	Annual Material	Total Annual

Costs to Systems

Customer Notice of Lead Results Costs	$979,000	$134,000	$1,112,000

	Self-certification Letter to States	$120,000	$16,000	$136,000

Total System Costs	$1,098,000	$150,000	$1,248,000

	Costs to States

Review Costs	$163,000	$0	$163,000

Total State Costs	$163,000	$0	$163,000

Totals may not add due to rounding.

4.7		Direct Costs Associated with Regulatory Change III.F

	 (a) Changes to the mandatory text of the written materials

	(a)(1) Customer Notification

		Activities resulting from regulatory change

	Regulatory change III.F(a)(1) substantially reduces the mandatory
language required for delivery to all bill paying customers after a lead
Action Level exceedance and gives systems more flexibility in developing
the notification. Systems are required to address several topics in the
notification, namely: “sources of lead”, “steps to reduce
exposure”, “what happened”, and “what is being done”. This
analysis assumed that template language will be provided for the sources
of lead and steps to reduce exposure sections. However, by their nature,
the “what happened” and “what is being done” sections will need
to be customized by each system to reflect their specific conditions.
Therefore, the additional activity under this change is the effort
required to develop the sections specific to the system.

Costs to systems

	In order to estimate the additional direct costs associated with
regulatory change III.F(a)(1), information is needed on the number of
community water systems that exceed the lead Action Level and the burden
associated with language development activities.

Number of systems exceeding the lead Action Level:  This analysis uses
the number of water systems that have exceeded the lead Action Level
since 2003 as an estimate of the number of systems that will exceed the
lead Action Level each year in the near future. Exhibit 14 contains
estimates of the number of community and non-community systems exceeding
the lead Action Level annually by size category.

Exhibit 14: Number of Systems Exceeding Annually

System Size Category	CWSs that Exceed Lead AL1,2	NTNCWSs that Exceed
Lead AL1,2	All Systems that Exceed Lead AL1,2

<3.3K	473	411	884

3.3K-10K	54	1	55

10K-50K	40	1	41

50K-100K	7	0	7

>100K	7	0	7

Total	581	413	994

1. Data source: USEPA Survey of States - Questions on State
Implementation of Lead and Copper Rule. July 2004.

2. Data Source: www.epa.gov/safewater/lcrmr/lead-data.html, 8/30/05.

Burden to prepare system specific notification language: Because the
current notification after an Action Level exceedance relies solely on
mandatory language, the 2004 ICR does not provide a burden effort for a
similar activity. However, the ICR for the Public Notification Rule
(PNR) includes a burden estimate associated with a Tier 2 notification
(notice as soon as possible of an exceedance that does not pose an
immediate health threat). The 3.5 hours of labor per system will be used
to estimate the additional burden associated with developing the new
language after an Action Level exceedance.

	The direct costs to systems for compliance with Regulatory Change
#III.F(a)(1) are summarized in Exhibit 15 and estimated to be $91,400
annually, all in labor costs. Detailed estimates are provided in
Appendix H-2.

Exhibit 15: Summary of Direct Costs Associated with Regulatory Change
III.F(a)(1)

(4th Qtr 2006$)

Annual Labor	Annual Material	Total Annual

Costs to Systems

Customer Notification Costs	$91,400	$0	$91,400

Total System Costs	$91,400	$0	$91,400

(b) Changes to better reach at-risk populations

 (b)(1) Delivery of brochures to organizations

		Activities resulting from regulatory change

Regulatory change III.F(b)(1) requires that CWSs exceeding the lead
Action Level distribute brochures to three additional types of
organizations – obstetric/gynecologist offices, licensed child care
facilities, and pre-schools. Also, an informational notice must now be
included with the brochures and the public health agency must be
directly contacted by phone, rather than through a mailed brochure. 

Costs to systems

	In order to estimate the additional direct costs associated with
regulatory change III.F(b)(1), information is needed on the number of
community water systems that exceed the lead Action Level, the number of
additional organizations to be contacted, and the burden associated with
distributing brochures to the additional organizations, the development
of an informational notice, and the direct contact with the public
health agency.

Number of community systems exceeding the lead Action Level:  The number
of CWSs that exceed the lead Action Level can be found in Exhibit 11.

Number of additional organizations to be contacted: The number of
additional establishments to be contacted is estimated at 193 per
100,000 population served. This value includes 178 per 100,000 licensed
child day care facilities based on the number of licensed child day care
facilities (500,143) spread over the national population (281,422,000).
The total also includes 15 ob/gyns per 100,000 population (41,900 
ob/gyns per 281,422,000).

Burden to contact additional organizations: Systems serving greater than
3,300 will incur an additional 1 hour in burden to generate and update
lists of additional facilities. These systems will also incur production
costs of 0.25 hours for every 100 additional brochures and applicable
mailing and materials costs.

Burden to develop informational notice:  Based on similar activities,
this analysis assumes that developing an informational notice for
distribution with the brochures will take a system 1 hour.

Burden to directly contact public health agency:  Based on similar
activities, this analysis assumes that directly contacting the public
health agency through a telephone call will require an additional 0.5
hours.

The direct costs to systems for compliance with Regulatory Change
#III.F(b)(1) are summarized in Exhibit 16 and estimated to be $43,300
annually, in labor costs and material costs. Detailed estimates are
provided in Appendices H-3 through H-5.

Exhibit 16: Summary of Direct Costs Associated with Regulatory Change
III.F(b)(1)

(4th Qtr 2006$)

Annual Labor	Annual Material	Total Annual

Costs to Systems

Contacting Additional Orgs	$21,900	$21,400	$43,300

Total System Costs	$21,900	$21,400	$43,300

(b)(2) Additional activities

		Activities resulting from regulatory change

	Regulatory change III.F(b)(2) requires systems to perform additional
public notification activities. Systems are given a choice of 8
activities. Systems serving fewer than 3,300 must implement 1 activity
from the list while other systems must implement 3 activities.

Costs to systems

	In order to estimate the direct costs for regulatory change
III.F(b)(2), the cost for each of the activities per system needs to
estimated. Exhibit 17 contains a summary of the assumptions used to
derive the cost per system for the eight activities. Detailed
calculations can be found in Appendices H-6 through H-20. Exhibit 18
summarizes the resulting costs per system.



Exhibit 17: Assumptions Used to Derive System Costs for III.F(b)(2)

III.F(b)(2)(i) Public Service Announcements

	Production of a radio PSA involves developing a script for the spot and
then producing an audio of the spot. 

For small systems (serving fewer than 10,000) assume produce 1 radio PSA
using freelance voice talent and in-house staff to prepare the content
of the PSA. Assume $50 for the voice-over, based on internet quotes from
free-lance talent and 2 hours for the system to develop the contents.
Total cost per radio PSA: $95.

For systems serving greater than 10,000, assume produce 1 radio PSA and
1 TV PSA. 

For a large system to produce a radio PSA, assume they use union talent
at a studio. Based on internet quotes, union talent is about $280 per
hour plus $80 per hour for studio time. Also assume that a large system
uses a freelance writer to develop the script at $200 for 2-3 hours of
effort. Total cost for radio PSA: $560.

For a large system to produce a TV PSA, assume on-camera talent at about
$560 per hour, plus studio time (based on internet quotes) and script
development. Total cost for TV PSA: $840.

III.F(b)(2)(ii) Paid Advertisements

	Assume 1 newspaper advertisement, 10 column inches (about 1/8 of a
page), rates derived from internet research.

Rate per 10 column inch advertisement for system >1,000,000: $5,000

Rate per 10 column inch advertisement for system 50k to 1 mil: $850

Rate per 10 column inch advertisement for system 3.3k to 50k: $180

Rate per 10 column inch advertisement for system <3.3k: $105

III.F(b)2(iii) Display Information in Public Areas

	Assumed to involve posting a notice at local grocery stores or other
locations. Posting would be free, but costs incurred to travel to
identify and travel to establishments, plus materials cost. 

Assume 1 hour to do 5 postings.  Number of postings varies by system
size.

III.F(b)(2)(iv) Internet Notification

	Assumed to entail email contact with all customers. 

Requires time to develop email and review contact list.  Time varies by
system size.

Assume small systems have an email list.  Large and medium systems must
purchase list.

III.F(b)(2)(v) Public Meetings

	For systems serving fewer than 3,300, assume that system reps would
bring up the issue for discussion at an existing town meeting. Assume 2
hours preparation and meeting time.

For systems serving over 3,300, assume conduct of separate public
meeting of 2.5 hours. Effort includes making logistical arrangements,
preparing 30 – 45 minute presentation, attending the meeting, and
follow-up activities.

III.F(b)(2)(vi) Delivery to Every Household

	Delivery to every postal address, either through mail or distribution
of flyers. Based on internet quotes for distribution of flyers: $.12 to
$.25 per piece, based on volume. Assume delivery of a flyer to all
households in a system: $.25 per household for systems serving fewer
than 10k, $.17 for systems serving 10-50k, $.12 for systems serving
>50k, $.04 for systems serving >100k (assumes insert into existing
mailing). 

Reduce population by 23% to take out the population that lives in
multi-family housing, who may not be adequately reached by flyers). [64
million pop in multifamily/281 million total population = 23%]

III.F(b)(2)(vii) Targeted Contact

	Assume system purchases list of targeted populations, such as pregnant
women and children. 

Based on Portland experience and internet quotes, assume $250 for
purchase of targeted list. Assume that list is purchased once. This
up-front cost is pro-rated over 3 activities and 3 years.

Assume 1 targeted communication for every 250 population served
(approximately 2000 homes for a population served of 482,500 for
Portland). 

Assume $0.44 for materials and postage. Assume 15 minutes for 100 copies
production labor.

III.F(b)(2)(viii) Provide Materials Directly to Multi-family and
Institutions

	Assume an effort to identify multi-family homes and institutions.
Assume 165 multi-family units per 100,000 population (in buildings with
10 or more units) from Census. 

Assume 5 minute per establishment to identify multi-family homes and
institutions. Assume that identification is done once. This up-front
cost is pro-rated over 3 activities and 3 years 

Assume $0.44 for materials and postage. Assume 15 minutes for 100 copies
production labor. 

Exhibit 18: Summary of Cost Per System for Activities
III.F(b)(2)(i)-(viii)

(4th Qtr 2006$)

System Size

Category	(i) Public Service Announcements	(ii) Paid Advertisements	(iii)
Display in Public Areas	(iv) Internet Notification	(v) Public Meetings
(vi) Delivery to Every Household	(vii) Targeted Contact	(viii) Materials
Directly

to Multi-Family & Institutions

25-100	$98	$105	$24 	$24 	$48 	$7 	$34	$12

101-500	$101	$105	$26 	$26 	$51 	$30 	$35	$15

501-3,300	$105	$180	$111 	$28 	$55 	$166 	$37	$27

3.3K-10K	$118	$180	$137 	$420 	$900 	$435 	$44	$81

10K-50K	$1,400	$850	$696 	$596 	$2,400 	$1,114 	$66	$303

50K-100K	$1,400	$5,000	$1,392 	$596 	$3,000 	$2,448 	$138	$945

>100K	$1,400	$5,000	$3,943 	$1,035 	$5,000 	$3,874 	$563	$5,035

	Determining which activity or combination of activities systems will
regularly choose is subject to considerable uncertainty. Systems will
consider many factors in choosing activities. Certainly cost will be an
important factor, but effectiveness and ability to reach a variety of
audiences may also be considered. In the absence of information on the
selection of activities, this analysis conservatively assumes that all
activities are equally likely to be chosen. The average cost per system
for each size category is calculated and assumed to represent the
typical cost for this regulatory change. Because of the uncertainty
entailed in this assumption, Appendix I contains results of sensitivity
analyses that calculate per system costs based on alternative scenarios
for choosing activities.

The direct costs to systems for compliance with Regulatory Change
#III.F(b)(2) are summarized in Exhibit 19 and estimated to be $292,700
annually, in labor costs. Detailed estimates are provided in Appendices
H-6 through H-20.

Exhibit 19: Summary of Direct Costs Associated with Regulatory Change
III.F(b)(2)

(4th Qtr 2006$)

Annual Labor	Annual Material	Total Annual

Costs to Systems

Additional Activities	$292,700	$0	$292,700

Total System Costs	$292,700	$0	$292,700

(c) Changes to help systems maintain communication with consumers
throughout the exceedance

(c)(1) Adding Note to Customer Bills for CWSs that Exceed the Lead
Action Level

		Activities resulting from regulatory change

	Regulatory change III.F(c)(1) requires that CWSs exceeding the lead
Action Level include a specific message on every water bill during the
period of exceedance no less than quarterly, instead of on just one bill
per year. 

Costs to systems

	In order to estimate the additional direct costs associated with
regulatory change III.F(c)(1), information is needed on the number of
community water systems that exceed the lead Action Level, the frequency
of billing for water systems, and the burden associated with adding a
message to a water bill.

Number of community systems exceeding the lead Action Level:  The number
of CWSs that exceed the lead Action Level can be found in Exhibit 11.

Frequency of billing for water systems:  This analysis assumes that
water systems bill their customers 4 times per year. Therefore, a water
system will need to include the message on 3 (4-1=3) additional water
bills per year. 

Burden to include a message of water bills:  The burden to include the
message on a water bill is assumed to be 1 hour per billing cycle. The
additional burden for all 3 cycles is 3 hours, with no material costs.

The direct costs to systems for compliance with Regulatory Change
#III.F(c)(1) are summarized in Exhibit 20 and estimated to be $47,400
annually, in labor costs. Detailed estimates are provided in Appendix
H-21.

Exhibit 20: Summary of Direct Costs Associated with Regulatory Change
III.F(c)(1)

(4th Qtr 2006$)

Annual Labor	Annual Material	Total Annual

Costs to Systems

Adding note to customer bills	$47,400	$0	$47,400

Total System Costs	$47,400	$0	$47,400

(c)(2) Posting notice on website

		Activities resulting from regulatory change

Regulatory change III.F(c)(2) requires that CWSs serving greater than
100,000  and exceeding the lead Action Level post a notice of the
exceedance on their website.

Costs to systems

		In order to estimate the additional direct costs associated with
regulatory change III.F(c)(2), information is needed on the number of
community water systems that exceed the lead Action Level and serve more
than 100,000, and the burden associated with posting a notice on a
website.

Number of community systems serving more than 100,000 and exceeding the
lead Action Level:  The number of CWSs serving more than 100,000 that
exceed the lead Action Level can be found in Exhibit 11.

Burden to post a notice on a website:  The PWSS ICR estimates that the
burden for a similar activity (posting the Consumer Confidence Report to
a public internet site) is 0.5 hours per system.  This analysis assumes
that there are no material costs associated with this activity.

The direct costs to systems for compliance with Regulatory Change
#III.F(c)(2) are summarized in Exhibit 21 and estimated to be $100
annually, in labor costs. Detailed estimates are provided in Appendix
H-22.

Exhibit 21: Summary of Direct Costs Associated with Regulatory Change
III.F(c)(2)

(4th Qtr 2006$)

Annual Labor	Annual Material	Total Annual

Costs to Systems

Posting to website	$100	$0	$100

Total System Costs	$100	$0	$100

(c)(3) Public Service Announcements and Press Releases

		Activities resulting from regulatory change

Regulatory change III.F(c)(3) eliminates the need for systems to submit
public service announcements (PSAs) to radio and TV stations once every
6 months and add the requirement to submit a press release to these
entities once per year while under an Action Level exceedance. The 2004
ICR assumes that, for a PSA, a system will submit the text of a notice
to a radio or TV outlet, not produce a tape or video. Thus, the level of
effort required to submit a PSA is equivalent to the level of effort
required to submit a press release in the 2004 ICR. The substitution of
a press release for a PSA does not result in any change in burden.
However, the reduction in frequency from once every 6 months to once
every year results in reduced effort of 1 notification per year. 

Costs to systems

In order to estimate the additional direct costs associated with
regulatory change III.F(c)(3), information is needed on the number of
community water systems that exceed the lead Action Level serving more
than 3,300 and the reduced burden associated with 1 less notification
per year.

Number of community systems exceeding the lead Action Level serving more
than 3,300:  Under the current regulation, only community water systems
serving more than 3,300 are subject to the PSA and press release
notifications. The number of CWSs that serve more than 3,300 and exceed
the lead Action Level can be found in Exhibit 11.

Reduction in Burden for PSA’s:  The 2004 ICR estimates that it takes a
system 1 hour to prepare a press release/PSA that is supplied to 5 radio
and 5 television stations. Since systems will prepare one fewer
notifications per year, the annual reduction in burden is 1 hour per
system, plus materials and postage.

The direct costs to systems for compliance with Regulatory Change
#III.F(c)(3) are summarized in Exhibit 22 and estimated to be $-4,200
annually, in labor costs and material costs. Detailed estimates are
provided in Appendix H-23.

Exhibit 22: Summary of Direct Costs Associated with Regulatory Change
III.F(c)(3)

(4th Qtr 2006$)

Annual Labor	Annual Material	Total Annual

Costs to Systems

PSA/Press releases	$-3,700	$-500	$-4,200

Total System Costs	$-3,700	$-500	$-4,200

	d. Changes to the required timing

	There are no cost implications associated with changing the timing of
notifications.

e. Changes to the Consumer Confidence Report

(e)(1) Adding an informational statement on lead to Consumer Confidence
Report

		Activities resulting from regulatory change

Regulatory change III.F(e)(1) requires that all CWSs include an
informational statement on lead in their Consumer Confidence Report.

Costs to systems

	In order to estimate the additional direct costs associated with
regulatory change III.F(e)(1), information is needed on the number of
community water systems that already include a lead informational
statement in their CCR and the burden associated with including the lead
statement.

Number of community systems that already include the statement:  The
number of CWSs is displayed in Exhibit 5. Some systems are already
required to include an informational statement about lead in their CCRs:
systems with the 95th percentile lead level above 15 ppb. There is no
method for estimating the number of systems whose 95th percentile
exceeds 15 ppb. There is an estimate of the number of systems with a
90th percentile exceeding 15 ppb; these are the systems exceeding the
Action Level. However, there is no estimate of the additional number of
systems with 90.1th to 95th percentile values above 15 ppb. As there is
no way to account for the systems between the 90th and 95th percentiles,
only systems with an Action Level exceedance are assumed to already
include the statement, resulting in an over-estimate of the cost
impacts.

Burden to include the informational statement in the CCR: This analysis
assumes that it will take systems of all sizes an additional 15 minutes
(0.25 hours) to include the informational statement in their CCR. There
are no material costs associated with this activity.

The direct costs to systems for compliance with Regulatory Change
#III.F(e)(1) are summarized in Exhibit 23 and estimated to be $354,600
annually, in labor costs. Detailed estimates are provided in Appendix
H-24.

Exhibit 23: Summary of Direct Costs Associated with Regulatory Change
III.F(e)(1)

(4th Qtr 2006$)

Annual Labor	Annual Material	Total Annual

Costs to Systems

Adding statement to CCR	$354,600	$0	$354,600

Total System Costs	$354,600	$0	$354,600

	Costs to Consult with State and Prepare Self-Certification Letter

There may be several opportunities for systems to consult with States
related to these public education activities.  For example, systems are
expected to consult with States on the choice of PE content and
activities, on the use of alternative delivery mechanisms besides bill
inserts, and on any needed schedule extensions. The labor associated
with consultation with States on activities is assumed to be 2 hours. 
In addition, systems will prepare a letter certifying to the State that
the required public notifications and activities have taken place.  The
labor associated with the self-certification letter is estimated at .12
hours per system (PWSS ICR, 2040-0090, page B-5), with postage and
supply costs of $0.43.  Detailed estimates are available in Appendix
H-7.

	The costs for systems associated with the changes in public education
requirements are summarized in Exhibit 24.

Exhibit 24: Summary of Direct Costs to Systems Associated with
Regulatory Change III.F

(4th Qtr 2006$)

Activity	Requirement	Annual System Labor Cost	Annual System Material
Cost	Total System Cost

a. Changes to the Mandatory Text of the Written Materials

III.F(a)(1)	Customer Notification 	$91,400	$0	$91,40000

b. Changes to Better Reach At-Risk Populations

III.F(b)(1)	Notify Additional Organizations	$21,900	$21,400	$43,300

III.F(b)(2)	Additional Activities i-viii	$292,700	$0	$292,700

c. Changes to Help Systems Maintain Communication with Consumers
Throughout the Exceedance

III.F(c)(1)	Customer Bills	$47,400	$0	$47,400

III.F(c)(2)	Post on Website	$100	$0	$100

III.F(c)(3)	PSAs and Press Releases	-$3,700	-$500	-$4,200

d. Changes to the Required Timing

No cost impact

e. Changes to Consumer Confidence Report

III.F(e)(1)	CCR Statement	$354,600	$0	$354,600

Costs to Consult with State and Self-Certify

	Consultations with State	$31,600	$0	$31,600

	Self-certification letter	$1,900	$300	$2,100

Total Costs to Systems for PE Requirements (III.F)

TOTAL	$838,000	$21,000	$859,000

Note: Totals may not add due to rounding.

Costs to States (for III.F)

	Under Regulatory Change, States will incur costs to review the language
of public notifications after Action Level exceedances and to consult
with systems on their additional activities. States will no longer have
to approve changes to the communication activities for systems serving
between 501-3,300, resulting in a slight decrease in burden.

Burden for review and consultation: The decrease in burden for States to
approve a waiver for systems serving 500-3,301 is assumed to be 0.5
(based on comparable waiver activities in the 2004 ICR). States will
require 2 hours for review and consultation on PE activities, including
message content, choice of activities, alternative mechanisms, and any
necessary schedule extensions.  States will also review the
self-certification letters at 0.10 hours per letter ((PWSS ICR,
2040-0090, page B-7).

The direct costs to States for compliance with Regulatory Change #III.F
are summarized in Exhibit 25 and estimated to be $63,000 annually, in
labor costs. Detailed estimates are provided in Appendix H-25.

Exhibit 25: Summary of Direct Costs to States Associated with Regulatory
Change III.F(7)

(4th Qtr 2006$)

Annual Labor	Annual Material	Total Annual

Costs to States

Review and consultation	$63,000	$0	$63,000

Total State Costs	$63,000	$0	$63,000

4.8 	Direct Costs Associated with Regulatory Change III.G

		Activities resulting from regulatory change

		Under this regulatory change, systems would be required to reevaluate
lead service lines classified as “replaced” through testing if they
resume lead service line replacement programs. This would only apply to
a system that had (1) initiated a lead service line replacement program,
then (2) discontinued the program, and then subsequently (3) resumed the
program. When resuming the program, this system would have to reconsider
for replacement any lead service lines previously deemed replaced
through testing during the initial program. If a LSL was previously
determined to be replaced through testing, this means that the sample
previously collected from the LSL had a lead level less than the lead
Action Level so the utility was not required to physically replace it.
Utilities affected by Regulatory Change #III.G will need to put these
“tested-out” LSLs back into their inventory of lead service lines
that could be considered for replacement. Once these LSLs are back in
the inventory, we assume that they will be either retested or replaced,
with the cost of the additional testing a direct cost of the regulatory
change. The primary activities as a result of this regulatory change
include collecting samples from these LSLs and analyzing them for lead.
Replacement of lines that were previously tested-out may also occur as a
result of this change.

		Costs to systems

		Under this regulatory change, a specific subset of systems would be
required to sample previously “tested-out” lead service lines.
Estimating the cost and burden associated with these activities requires
information on several elements.

Number of systems required to perform lead service line replacement
under the LCR:  In the survey of States on LCR implementation, States
were asked “Does the state have any systems that have been required to
initiate lead service line replacement?”  Eleven States responded
“Yes” to this question. However, the survey did not ask exactly how
many systems were required to initiate lead service line replacement
programs. Six States provided sufficient information to derive a number
of systems within that State required to perform lead service line
replacement – a total of 28 systems. We assume that the remaining 5
States have 5 systems each (the average number of systems per State for
those States that did specify), plus 1 system for DC (which did not
respond to the survey) for a total of 54 systems required to perform
lead service line replacement. (See Appendix F-3 for details.)

Fraction of systems that performed required lead service line
replacement that subsequently exceed the lead Action Level:  The
regulatory change applies only to those systems that had performed
required lead service line replacement (although not necessarily total
replacement); brought compliance lead levels below the Action Level and
suspended lead service replacement; and then subsequently re-exceeded
the lead Action Level. There is no information on this small subset of
systems, although at least one system has met these criteria (DC WASA).
This analysis assumes that systems that had performed required lead
service line replacement (although not necessarily total replacement),
brought compliance lead levels below the Action Level and suspended lead
service replacement will exceed the Action Level at the same rate as the
universe of systems subject to the LCR. Thus, we assume that 1.4 percent
of the 54 systems or 1 system will exceed the Action Level and be
triggered back into lead service line replacement each year.

The number of lead service lines per system:  Recent information on the
average number of lead service lines in drinking water systems was
presented in EPA’s workshop on lead service line replacement.
According to the preliminary findings of a survey being conducted by
Black & Veatch for AWWA, 26 respondent utilities had an inventory of
558,135 lead service lines in 1992. Based on this data, the average
number of lead service lines per system is 21,467. In the absence of
specific information on the number of lead service lines in the subset
of systems that have been required to do replacement, this analysis uses
the average value from the Black & Veatch study.

The fraction of lead service lines that had been “tested-out” rather
than physically replaced:  Costs for this regulatory change apply only
to those lead service lines that have been deemed replaced through
“testing-out” in a lead service line replacement program.
Information was available for the lead service line replacement program
for one system (DC WASA) that indicated that for one year (2003), 76
percent of the lead service lines were deemed replaced through sampling,
while 24 percent were physically replaced. Because this was early in the
replacement program, the percent of lines tested out might be high in
comparison with replacement over an entire program. In the absence of
additional data, this analysis assumes that 76 percent of lead service
lines are “tested-out” and would then be put back into the inventory
upon re-exceedance.

Cost and labor to test lead service lines:  The cost and labor to test
the lead level of a lead service line is similar to the tap sampling
cost and labor for lead and copper compliance monitoring. Estimates from
previous EPA documents assume 2 hours to collect each lead service line
sample. This estimate is slightly lower than the estimate for collecting
compliance monitoring tap samples, possibly to account for differences
in the need to identify and recruit participants. The labor and material
costs to analyze the sample is assumed to be the same as for compliance
monitoring:  1 hour of labor and $9.07 material costs. Appendix F-1
provides details on the derivation of the labor and costs for lead
service line replacement monitoring.

EPA does not have information on the number of systems using the
test-out provisions rather than physically replacing lines, so this
approach is conservative because it assumes that all systems in a lead
service line replacement program are using the test-out provisions. 
Systems removing lead service lines are not impacted by this change. 
While the rate at which systems are triggered back into lead service
line replacement might be higher than the initial rate, it is offset by
the conservative assumptions regarding systems using the test-out
provisions and the universe of systems that would stop their lead
service line replacement program and later resume it because of this
change.

Replacement of lines that were previously tested-out may also occur as a
result of this change.  EPA cannot quantify the costs associated with
this change for a number of reasons.  As noted above, EPA does not have
information on the number of systems and the number of lines that have
been previously tested-out and could be impacted by this change.  This
difficulty is further compounded by the fact that some lines may have
been replaced as part of the ongoing utility replacement programs.  In
the 1991 final regulatory impact analysis, EPA cited an AWWA survey that
produced an estimate of 1% of lead service lines being replaced per year
as part of ongoing utility replacement programs.  After promulgation of
the rule, many systems modified their ongoing utility replacement
programs to replace lead lines at a higher rate.  

Where lines would have to be replaced, the unit cost of replacement is
measured in $ per foot of line being replaced.  The 1991 final
regulatory impact analysis provided a range of $26 to $51 per foot,
depending upon system size, as the unit cost for lead service line
replacement.  Using the Engineering News Record Construction Cost Index,
updated estimates would range from $41 per foot for small systems to $80
per foot for large systems.  The length of the lead service line owned
by systems will also vary, which will affect costs. 

The direct Costs to systems as a result of Regulatory Change III.G are
therefore estimated to be $109,000 annually, which includes $101,000 in
labor costs and $9,000 in material costs. Estimates of Costs to systems
are summarized in Exhibit 26 and detailed in Appendix F-2. 

		Costs to States

		No direct costs are expected for State/Primacy agencies as a result of
Regulatory Change III.G. The State/Primacy Agencies will review utility
Lead Service Line replacement program annual reports but these costs
were captured previously in the Final Regulatory Impact Analysis of
National Primary Drinking Water Regulations for Lead and Copper, April
1991. 

Exhibit 26: Summary of Direct Costs Associated with Regulatory Change
III.G

(4th Qtr 2006$)

Annual Labor	Annual Material	Total Annual

Costs to Systems

LSL Tap Monitoring Costs	$101,000	$9,000	$110,000

Total System Costs	$101,000	$9,000	$110,000

Note: Totals may not add due to rounding.

4.9	Summary of Average Annual Costs

		The estimates of direct annual costs for the regulatory changes are
presented in Exhibit 27.

Exhibit 27:  Summary of Annual Direct Costs to Systems and States from
Regulatory Changes

(4th Qtr 2006$)

Regulatory Change	Annual Direct Costs to Systems	Annual  Direct Costs to
States	Total Annual Direct Costs

	Reporting	Monitoring	Customer Notification	Total

III.A	-	-	-	-	-	-

III.B	-	-	-	-	-	-

III.C	$61,000	$2,635,000	-	$2,696,000	$82,000	$2,778,000

III.D Low

III.D High	$506,000

$765,000	-	-	$506,000

$765,000	$163,000

$348,000	$669,000

$1,113,000

III.E	$136,000	-	$1,112,000	$1,248,000	$163,000	$1,411,000

III.F	$34,000	-	$825,000	$859,000	$63,000	$922,000

III.G	-	$110,000	-	$110,000	-	$110,000

TOTAL Low

TOTAL High	$736,000

$995,000	$2,745,000	$1,938,000	$5,418,000

$5,677,000	$471,000

$657,000	$5,890,000

$6,335,000

Note:  Totals may not add due to rounding.

* One-time costs associated with III.A are summarized in Exhibit 28 with
other one-time costs.

4.10 	Costs to Review and Implement Regulatory Changes

		Activities resulting from regulatory change

Systems and State/Primacy Agencies will incur one-time upfront costs
associated with reviewing and implementing the overall LCR regulatory
changes. For systems, activities include reviewing the rule changes and
communicating with staff and management. For States/Primacy Agencies,
activities include regulation adoption, program development, and
miscellaneous training.

		Costs to systems

Systems covered by the Lead and Copper Rule will incur initial costs to
read the rule and communicate requirements to other staff, either
informally or through training.

All systems covered by the LCR will incur costs for the initial
activities (72,213).

The labor associated with one-time rule implementation activities varies
based on system size. For small systems serving fewer than 3,300, it is
assumed that systems take 5 hours to read the rule and communicate
relevant information to management and staff. For medium systems
(3,300-100k), it is assumed that systems take 8 hours to read the rule
and communicate relevant information to system staff. For the largest
systems (>100k), it is assumed that systems take 40 hours to read the
rule and communicate relevant information to system managers and staff.

The total costs to systems associated with the initial activities are
estimated at $10,971,000 as summarized in Exhibit 28. 

		Costs to States

Similar to one-time costs for utilities, States will also incur costs to
review the regulatory changes and implement the provisions through
regulatory adoption. 

All 57 State or Primacy Agencies will incur initial costs associated
with regulatory review and adoption.

The labor associated with these initial activities was derived from past
experience for similar drinking water rules. For the Minor Revisions to
the LCR, EPA assumed that regulatory adoption activities would require
0.25 FTE.  For another recent rule of similar scope, the Filter Backwash
Rule, EPA estimated that regulatory review and adoption activities would
require 0.125 FTE.   The analysis assumed the level of effort for this
rule would be slightly higher than these other two rules because of the
interactive nature of some of the rule provisions: .33 FTE or 600 hours
to review and adopt the regulatory changes.

The total direct costs for initial implementation activities for States
is summarized in Exhibit 28 and detailed in Appendix G-2.

Exhibit 28: Summary of Direct Costs Associated with One-Time Costs

(4th Qtr 2006$)

One Time  Labor Costs

Costs to Systems

Review Rule & Communication	$10,971,000

	III.A	$104,000

Total System Costs	$11,075,000

Costs to State/Primacy Agencies

	Regulation Adoption 	$1,488,000

	III.A	$162,000

Total State Costs	$1,650,000

TOTAL Rule Implementation Costs	$12,725,000

Note:  Totals may not add due to rounding.

 

5	Indirect Cost and Health Risk Reduction Implications of Rule Changes

		The revisions will result directly in increased administrative costs
for systems and States – costs to conduct the increased required
monitoring, notification, and testing and to meet the more tightly
specified requirements for these activities. The revisions do not affect
the Action Levels, corrosion control requirements, line replacement
requirements, or other provisions in the existing rule that directly
determine the degree to which the rule abates risks from lead and
copper. However, the increase and change in administrative activities
that will result from the revisions will result in the generation of new
information (e.g., more monitoring data, some of which may show
exceedances), and some systems or individuals will likely respond to
this new information by taking measures to abate lead and copper
exposures. We thus believe the revisions will have an indirect impact on
the degree to which lead and copper control measures may be implemented,
and on the overall benefits and costs from the LCR. 

		The potential impacts of these revisions on lead and copper abatement
measures are quite speculative. The revisions will require some systems
to generate new information which in some cases may be provided to
States and customers. The information that is generated may turn out to
suggest lead and copper threats that would not otherwise have been
discovered (or such threats might be discovered sooner than they
otherwise would have). Upon obtaining this information, a system itself,
the State, or some of the system’s customers might take actions to
address these threats. The revisions, however, require only the
generation of the information. They do not specifically require adoption
of any practices or measures to reduce the levels of lead and copper in
drinking water. It is difficult to project now what the content will be
of the information generated pursuant to the regulation, and it is even
further uncertain how systems and individuals might act in response to
the new information when it is developed. For these two reasons – the
lack of any direct requirement in the revisions for systems or
individuals to implement exposure reduction measures, and the
uncertainty in tracing the linkages from the regulation to new
information to exposure prevention measures to changes in risks and
costs – EPA is unable to quantify the eventual indirect impacts on
risks, benefits, and costs that might ensue from these regulatory
changes. EPA does expect that overall benefits from the LCR will
increase, as a result of the indirect effect of the revisions on the
actions of individual consumers and systems. In this section, we provide
a qualitative picture of what some of these indirect impacts might be.

		Exhibit 29 summarizes the manner in which each revision might perhaps
induce actions that reduce lead and copper exposures, resulting
indirectly in both costs and health risk reduction benefits. The Exhibit
shows only the indirect costs and benefits that might result from the
provisions; the Exhibit does not repeat the direct cost impacts that
were estimated in Section 4.Exhibit 29: Summary of Preliminary Cost and
Health Risk Reduction Implications of the LCR Short Term Rule Changes

Administrative Impact	Potential Response	Implication for Indirect Costs
Implication for Health Risk Reductions

Regulatory change III.A – Minimum number of samples required

NTNCWSs that have fewer than 5 taps in States that exercise their
discretion to allow 1 sample per tap may take fewer samples.	Some
NTNCWSs may take fewer samples, but could be more easily triggered into
an Action Level exceedance with greater frequency because of the
calculation of the 90th percentile (highest sample).	Additional systems
that exceed the Action Level may incur costs for: 1) compliance measures
(e.g., corrosion control, LSL replacement); and 2) increased monitoring
when they revert to standard monitoring.	To the extent there are actions
taken to reduce lead due to additional exceedances, there will be
resulting health risk reductions.

Regulatory change III.B - Definitions for monitoring and compliance
periods

Clarifies that the time limits within which various items must be
completed following an Action Level exceedance begin with the end of the
monitoring period when the exceedance was found (typically September)
rather than beginning with the end of the calendar year.	May accelerate
by several months the deadlines for initiation and completion of all
actions following an exceedance.	May accelerate by several months the
time when costs for public education and compliance efforts are incurred
following an Action Level exceedance.	Corresponding possible several
month acceleration of health risk reduction benefits.

Regulatory change III.C – Reduced monitoring criteria 

A system that is conducting reduced monitoring will have to revert to
standard monitoring if it exceeds the lead Action Level. Under existing
regulations, a system could remain on reduced monitoring despite an
Action Level exceedance if treated water quality parameters are within
specified limits.	Such systems will have to monitor more sites during
each monitoring period (sampling the larger, “standard”, number of
sites rather than the “reduced” number of sites)  Additional
monitoring costs will result, but these are direct costs, considered in
Section 4.

Monitoring more sites will improve the statistical accuracy of the
judgment on whether the system really does or does not exceed the lead
Action Level. Both Type 1 and Type 2 errors will be reduced (see Note
1). Monitoring more sites is not expected systematically to either
increase or decrease a system’s likelihood of being found to exceed
the Action Level.

Monitoring more sites could either hasten or delay the time at which a
system will draw a conclusion from its monitoring as to whether the
Action Level is exceeded.	Greater statistical accuracy and better
decisions on whether a system really does exceed the Action Level means
that compliance efforts, public education, etc. will be better targeted
at systems where they are warranted.

It is possible that monitoring and sampling sooner after an Action Level
exceedance could reduce costs if the re-sampling shows values under the
Action Level. For example, public notification and other measures
(flushing, pitchers) might last for only 6 months rather than a year if
re-sampling after 6 months is below the Action Level. 	Potential impacts
on benefits will be like those on costs – varying from system to
system. Standard monitoring will cause some systems to implement
compliance measures and reduce risks sooner and for longer.

Overall improved statistical accuracy with standard monitoring will tend
to mean that compliance efforts and risk reduction will focus on systems
where there are larger risks.

Sampling sooner or more intensively with regular monitoring after an
Action Level exceedance could result in health risk reductions. If
sampling demonstrates continued exceedance, a system would have quicker
feedback on effectiveness of actions and could proceed more quickly to
other measures to reduce lead. In the case of sampling 6 months vs. 12
months after an exceedance, further actions that would reduce lead could
begin 6 months earlier.

Regulatory change III.D – Advanced notification and approval
requirement for treatment change or source addition

System notifies State of long-term treatment change or source water
addition prior to implementation for State approval.

Some States already require review and approval, so the provision has no
or little impact in these States.	The State may request that the system
provide additional information or require the system to conduct sampling
or pilot studies prior to the treatment change becoming effective. This
could delay implementation of the treatment change. It could also result
in modification of a change that could have had negative impacts.	A net
decrease in treatment costs may actually occur. Early State review may
avoid potentially costly mistakes. If a State has concerns or
suggestions about the impact of a treatment change, it will be less
expensive to modify treatment before the changes are made, rather than
after the fact.	Health risk reductions could result if pre-emptive
modifications are made to proposed treatment changes that reduce the
possibility of lead leaching.

Regulatory change III.E – Notification of sampling results

Systems notify customers of tap monitoring results.	For dwellings with a
tap where the monitored concentration exceeds the Action Level, some
fraction of owners/occupants will decide to act to reduce the
concentration, perhaps replacing lead lateral or fixtures, installing
filters, using bottled water, adopting flushing practices or contacting
the utility for further information or request for additional sampling.
Owner and/or occupants will bear the costs of whatever exposure
reduction measures they decide to implement.	Reduced lead/copper levels
will reduce health risks for the occupants of any dwelling where
exposure-reduction measures are implemented.

System letters to all homeowners may improve overall awareness of
sources of lead, and strategies to reduce exposure to lead.

Regulatory change III.F – Revisions to public education requirements

Systems use a variety of methods to more effectively communicate with
customers about potential risks due to lead.	For a system with a lead
Action Level exceedance or a lead detect, a greater fraction of
customers will be made aware of potential risks due to lead levels and
may act to reduce lead levels.	Owner and/or occupants will bear the
costs of whatever exposure reduction measures they decide to implement.
Inclusion of statement in the CCR may improve overall awareness of
sources of lead, and strategies to reduce exposure to lead. Reduced lead
levels will reduce health risks for the occupants of any dwelling where
exposure-reduction measures are implemented.

Regulatory change III.G – Reevaluation of Lead Service Lines deemed
replaced through testing

The system that exceeds the lead Action Level following a treatment
change will need to identify all lead service lines that had previously
been determined to be replaced via sampling. The utility will need to
develop a testing schedule and contact all affected homeowners regarding
the testing program.	It is expected that most homeowners that utilize a
lead service line will be supportive of the testing program.

Homeowners may be interested in physical replacement of the LSL or
additional sampling, particularly if the sample’s lead level exceeds
the lead Action Level.

The cost of retesting a previously “tested-out” line is a direct
cost of the rule.

	If a previously “tested-out” line is retested and is over the
Action Level, this line will eventually be replaced, an indirect cost
that is attributable to the rule. However, it could take many years
before this cost is incurred.

There may be short term implications associated with increasing the
number of lead service lines in the baseline. If the number of lines
that need to be replaced or tested out is calculated based on the size
of the inventory, a slightly larger inventory will mean a slight
increase in the number of lines needed to reach the 7 percent
replacement goal.	If a previously “tested-out” line is retested and
is over the Action Level, health risk reductions will occur when the
line is replaced.

Note 1 (see Regulatory Change III.C): In statistical terms, type 1 and
type 2 errors are errors that can occur while testing a statistical
hypothesis. In this case, the hypothesis may be that 90 percent of
samples will have a lead level < 15 ppb. When a utility collects a
limited number of samples thus generating limited lead data points, it
is possible that the hypothesis could be rejected (found to be not true)
even when it is true (a Type 1 error) or that the hypothesis is not
rejected (found to be true) when it is in fact false (a Type 2 error).
These errors occur because of sampling variability and the occurrence of
unrepresentative samples. These errors can be minimized by collecting
more samples. 

		As shown in the Exhibit, four regulatory revisions seem more likely
than the others to potentially influence systems or individuals to
undertake exposure prevention measures. These include provisions III.C,
III.E, III.F, and III.G. Although it is not feasible to quantify the
monetary value of these possible exposure reductions, the relationship
of benefits to costs for reductions in lead in drinking water exposure
in general suggests that benefits would exceed costs if quantified. For
example, in the 1991 RIA for the Lead and Copper Rule, the ratio of
quantified benefits to costs is 6.7 to 1, meaning that there were 6.7
times more benefits than costs.  If this relationship continues to hold
true, it’s likely that any direct and indirect costs for the
regulatory changes that result in exposure reductions would be offset by
health risk reduction benefits.

6	Administrative Requirements

6.1 	Executive Order 12866:  Regulatory Planning and Review

Under Executive Order 12866, [58 Federal Register 51735 (October 4,
1993)] this action is a "significant regulatory action".  Accordingly,
EPA submitted this action to the Office of Management and Budget (OMB)
for review under EO 12866 and any changes made in response to OMB
recommendations have been documented in the docket for this action.

This document represents an analysis of the potential costs and benefits
associated with this action.  A copy of this analysis is available in
the docket for this action and the analysis is briefly summarized in
Section IV of the preamble for the final rule.

6.2 	Paperwork Reduction Act

The information collection requirements in this rule have been submitted
for approval to the Office of Management and Budget (OMB) under the
Paperwork Reduction Act, 44 U.S.C. 3501 et seq.  The information
collection requirements are not enforceable until OMB approves them.

Need for the Information Collection

 

	EPA requires current information on lead and copper contamination to be
provided to consumers and states. Recent highly publicized incidences of
elevated drinking water lead levels prompted EPA to review and evaluate
the implementation and effectiveness of the LCR on a national basis.  As
a result of this multi-part review, EPA identified seven targeted rule
changes that clarify the intent of the LCR and enhance protection of
public health through additional information gathering and public
education.  Consumers and states will use the information collected as a
result of the short-term revisions to the LCR to determine the
appropriate action they should undertake. The rule revisions described
in Section 3 of this document are intended to improve the implementation
of the LCR, and do not alter the original maximum contaminant level
goals or the fundamental approach to controlling lead and copper in
drinking water. 

Section 1401(1)(D) of the SDWA requires that regulations contain
“criteria and procedures to assure a supply of drinking water which
dependably complies with such maximum contaminant levels, including
accepted methods for quality control and testing procedures to insure
compliance with such levels and to insure proper operation and
maintenance of the system....” Furthermore, Section 1445(a)(1) of the
SDWA requires that every person who is a supplier of water “shall
establish and maintain such records, make such reports, conduct such
monitoring, and provide such information as the Administrator may
reasonably require by regulation to assist the Administrator in
establishing regulations…,in determining whether such person has acted
or is acting in compliance....” In addition, Section 1413(a)(3) of the
SDWA requires States to “keep such records and make such reports...as
the Administrator may require by regulation.”

Section 1412(b) of the SDWA, as amended in 1996, requires the Agency to
publish maximum contaminant level goals and promulgate NPDWRs for
contaminants that may have an adverse effect on the health of persons,
are known to or anticipated to occur in PWSs, or, in the opinion of the
Administrator, present an opportunity for health risk reduction. The
NPDWRs specify maximum contaminant levels or treatment techniques for
drinking water contaminants (42 USC 300g-1). Section 1412 (b)(9)
requires that EPA no less than every 6 years review, and if appropriate,
revise existing drinking water standards. Promulgation of the LCR
implements these statutory requirements 

Burden Estimate

The universe of respondents for this ICR is comprised of the 52,838 CWSs
and 19,375 NTNCWSs, for a total of 72,213 systems, and 57 State primacy
agencies. Exhibit 30 presents a summary of average annual burden and
costs for the ICR period of late September 2007 through late September
2010 for a lower bound and upper bound estimate (depending on
assumptions about the timing of rule implementation).

The average annual system burden is estimated at 189,369 - 271,997
hours. The average annual system costs are projected at $5.6 to $8.4
million. 

		The average annual State burden is estimated at 17,628 – 25,125
hours. The average annual State costs are projected at $0.8 - $1.1
million. 

		These annual costs reflect the costs to systems and States for the
first three years after rule promulgation and consist of the one-time
direct costs for rule review and implementation, as well as activities
related to the seven regulatory changes.  

Bottom Line Burden Hours and Costs

		The average annual burden and costs for the initial three year period
is summarized in Exhibit 30. The total burden and costs for each
regulatory change is explained in Appendices B and C of the ICR document
for the final rule.

Exhibit 30: Summary of the Total Burden and Costs from September 2007
through September 2010 for the Regulatory Changes

(4th Qtr 2006$)

Respondent	Number of Respondents	Burden (hours)	Cost (in $millions) 

Lower Bound	Upper Bound	Lower Bound	Upper Bound

PWSs	72,213	189,369	271,997	$5.6	$8.4

State	57	17,628	25,125	$0.8	$1.1

Total	72,270	206,997	297,122	$6.4	$9.5

		The estimates of the burden and costs by year are summarized in
Exhibit 31 for the lower bound estimate and Exhibit 32 for the upper
bound estimate. 

Exhibit 31: A Summary of the Burden and Costs by Year for the Regulatory
Changes – Lower Bound Estimate

(4th Qtr 2006$)

Respondent	Year 1	Year 2	Year 3

	Burden (hours)	Cost 

(in $millions)	Burden (hours)	Cost 

(in $millions)	Burden (hours)	Cost 

(in $millions)

PWSs	179,622	$4.9	219,537	$6.0	168,948	$5.8

State	15,390	$0.7	18,810	$0.8	18,685	$0.8

Total	195,012	$5.6	238,347	$6.9	187,633	$6.6

Note:  Totals may not add due to rounding.

Exhibit 32: A Summary of the Burden and Costs by Year for the Regulatory
Changes – Upper Bound Estimate

(4th Qtr 2006$)

Respondent	Year 1	Year 2	Year 3

	Burden (hours)	Cost 

(in $millions)	Burden (hours)	Cost 

(in $millions)	Burden (hours)	Cost 

(in $millions)

PWSs	485,479	$13.9	165,256	$5.7	165,256	$5.7

State	45,389	$2.0	14,993		$0.7	14,993	$0.7

Total	530,868	$15.9	180,249	$6.3	180,249	$6.3

Note:  Totals may not add due to rounding.

		

Burden Statement

For the ICR period of September 2007 through September 2010 associated
with the short-term revisions to the LCR, the average burden for systems
to implement the requirements of the short-term LCR revisions is
estimated to be 2.6 – 3.8 hours per system per year. The average
annual cost to systems is expected to be $77 - $117 per system per year.
System burden includes time required read and understand the rule
requirements and communicate those requirements to system personnel and
management, as well as activities related to the regulatory changes. The
average burden for State agencies is estimated to be 309 - 441 hours per
State per year. This burden includes the time to inform systems of the
requirements and perform primacy-related activities, as well as
activities related to the regulatory changes. The estimated annual State
cost is estimated to be $13,500 - $19,300 per State per year.

Burden means the total time, effort, or financial resources expended by
persons to generate, maintain, retain, or disclose or provide
information to or for a Federal agency. This includes the time needed to
review instructions; develop, acquire, install, and utilize technology
and systems for the purposes of collecting, validating, and verifying
information, processing and maintaining information, and disclosing and
providing information; adjust the existing ways to comply with any
previously applicable instructions and requirements; train personnel to
be able to respond to a collection of information; search data sources;
complete and review the collection of information; and transmit or
otherwise disclose the information. 

An agency may not conduct or sponsor, and a person is not required to
respond to a collection of information unless it displays a currently
valid OMB control number.  The OMB control numbers for EPA's regulations
in 40 CFR are listed in 40 CFR part 9.  When this ICR is approved by
OMB, the Agency will publish a technical amendment to 40 CFR part 9 in
the Federal Register to display the OMB control number for the approved
information collection requirements contained in the final rule.

6.3 	  SEQ CHAPTER \h \r 1 Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) generally requires an agency to
prepare a regulatory flexibility analysis of any rule subject to notice
and comment rulemaking requirements under the Administrative Procedure
Act or any other statute unless the agency certifies that the rule will
not have a significant economic impact on a substantial number of small
entities. Small entities include small businesses, small organizations,
and small governmental jurisdictions.

The RFA provides default definitions for each type of small entity.
Small entities are defined as: (1) a small business as defined by the
Small Business Administration’s (SBA) regulations at 13 CFR 121.201;
(2) a small governmental jurisdiction that is a government of a city,
county, town, school district or special district with a population of
less than 50,000; and (3) a small organization that is any
“not-for-profit enterprise which is independently owned and operated
and is not dominant in its field.”  However, the RFA also authorizes
an agency to use alternative definitions for each category of small
entity, “which are appropriate to the activities of the agency”
after proposing the alternative definition(s) in the Federal Register
and taking comment. 5 USC 601(3) - (5). In addition, to establish an
alternative small business definition, agencies must consult with
SBA’s Chief Counsel for Advocacy. 

For purposes of assessing the impacts of today’s final rule on small
entities, EPA considered small entities to be public water systems
serving 10,000 or fewer persons. As required by the RFA, EPA proposed
using this alternative definition in the Federal Register (63 FR 7620,
February 13, 1998), requested public comment, consulted with the Small
Business Administration (SBA), and finalized the alternative definition
in the Consumer Confidence Reports regulation (63 FR 44511, August 19,
1998). EPA stated in that Final Rule that it would apply the alternative
definition to future drinking water regulations (including this one) as
well.

After considering the economic impacts of today’s final rule on small
entities, EPA certifies that this action will not have a significant
economic impact on a substantial number of small entities. The small
entities directly regulated by this final rule are small public water
systems serving 10,000 or fewer people on an annual basis. EPA has
determined that 68,286 small systems may be affected by the changes to
the LCR. Exhibit 33 provides a summary of these small systems, by size
category and system type.

Exhibit 33: The Number of Small Systems Affected by the Final Rule
Changes

Size	CWS	NTNCWS	TOTAL Small

<=100	13,766	9,548	23,314

101-500	16,240	6,997	23,237

501-1,000	5,914	1,925	7,839

1,001-3,300	8,298	795	9,093

3,301-10,000	4,707	96	4,803

Total	48,925	19,361	68,286

However, not all of these small entities will incur direct costs for all
of the final regulatory changes. In many cases, only a relatively small
subset of these systems will have to change practices to comply with the
regulatory changes. Exhibit 34 provides an estimate of the number of
small systems that will incur direct costs for each of the final
regulatory changes.

Exhibit 34: The Number of Small Systems Affected by Each Regulatory
Change

Regulatory Change	Small Systems Impacted Per Year

Regulatory Change #III.A	3,692

Regulatory Change #III.B	None – Clarifications of definitions with no
direct cost impact

Regulatory Change #III.C	854

Regulatory Change# III.D	1,009

Regulatory Change #III.E	60,735

Regulatory Change #III.F	49,337

Regulatory Change #III.G	1

	

Activities and Costs Associated With Rule Changes for Small Systems

EPA has estimated the burden and costs associated with the regulatory
changes, as described in section 4 of this document. The basis for many
of these input values and assumptions are described in detail in the
Economic Analysis, Section 4. The following summarizes the costs
estimated for small systems.

One-Time Activities

All small systems subject to the Lead and Copper Rule will be expected
to incur some costs to read the rule changes and communicate
requirements as necessary. The level of effort associated with these
activities could range from 5 - 8 hours for each small system. The
average cost per system for these activities is estimated at $138, for a
total cost of $9,404,000 for all 68,286 small systems. This assumes an
hourly fully loaded labor cost for small system employees ranging from
$23.86 to $33.96 (see Appendix B for derivation).  One-time costs range
from $124 for systems serving 25-500 to $270 for systems serving 3,301
to 10,000 people.

Activities for Regulatory Change III.A

Under Regulatory Change III.A, small systems with fewer than 5 taps in
States that allow 1 sample per tap will prepare and submit to the State
a one-time letter verifying the applicable number of taps and requesting
the use of the alternative sampling.  Eleven States supported the
alternative sampling in their comments on the proposed rule.  EPA
estimates that there are 3,692 small systems with fewer than 5 taps in
the 11 States (plus Alaska for small CWSs).  Preparing the one-time
request letter results in a one time cost of $28 per system across all
small subcategories. Total costs for all small systems likely to be
affected by Regulatory Change III.A are estimated at $104,000 per year.

Activities for Regulatory Change III.C

Under Regulatory Change III.C, all systems that exceed the lead Action
Level are triggered into regularly scheduled lead tap monitoring.
Additional costs are associated with taking lead samples more frequently
and reporting the results to States. EPA estimates that 854 small
systems exceed the lead Action Level each year. Changing from reduced
tap monitoring to regularly scheduled tap monitoring would result in an
average cost increase of $2,258 per year per system. Average annual
costs for this regulatory change range from $1,300 for the smallest size
subcategory (25-500) to $9,400 for systems serving 3,301 to 10,000. 
Total costs for all small systems likely to be affected by Regulatory
Change III.C are estimated at $1,929,000 per year.

Activities for Regulatory Change III.D

Small systems that are changing treatment or adding a source would incur
additional costs under Regulatory Change III.D to prepare data in
support of treatment changes or source addition, to submit the data to
the State for review, and to coordinate with the State during the
review. These activities are estimated to take an additional 7.5 hours
per system for each treatment change or source addition. The cost for
each small system that is changing treatment or adding a source is
estimated at $196. Average annual costs range from $186 for systems
serving 25-500 to $255 for systems serving 3,301 to 10,000 people.  The
total cost for all small systems likely to be affected by Regulatory
Change III.D is estimated at $198,000 per year.

Activities for Regulatory Change III.E

Most small systems are expected to incur additional costs under
Regulatory Change III.E when they are required to notify consumers of
tap monitoring results. The activities associated with notifying
customers vary based on the type and size of the system and include the
effort to prepare a self-certification letter for the State. The average
cost for small systems to notify customers is estimated at approximately
$17 annually.  This estimate assumes one labor hour to prepare a
customer notification letter per system, 0.12 hours to prepare the
self-certification letter, and $0.43 in material costs per sample for
CWSs.  EPA assumed one labor hour plus 0.12 hours for NTNCWSs, with
negligible material costs.  It is important to note that the majority of
small systems are assumed to meet the lead action level and are assumed
to be on triennial monitoring.  Therefore, this requirement will only
affect them once every three years.  Average annual costs range from $15
for the smallest size subcategory (25-500) to $32 for systems serving
3,301 to 10,000 people.  The total cost to all small systems likely to
be affected by Regulatory Change III.E is estimated at $1,060,000.

Activities for Regulatory Change III.F

Different provisions of Regulatory Change III.F apply to different
subsets of systems. All small community water systems will incur costs
to include a statement on lead in the Consumer Confidence Report (CCR),
at an average cost of $7 per system, based on the assumption of 0.25
hours to add an informational statement on lead to the CCR. Small
community water systems that exceed the Lead Action Level will incur
costs from a variety of public education activities, at an average cost
per system of $265. Average annual costs for systems in the small size
subcategories that do not exceed the Lead Action Level range from $6 for
systems serving 25-500 to $8 for systems serving 3,301 to 10,000 people.
 For those systems that do exceed the Lead Action Level, average annual
costs range from $180 to $1,200.  The total cost for all small systems
likely to be affected by Regulatory Change III.F is estimated at
$569,000.

Activities for Regulatory Change III.G

Regulatory Change III.G applies to systems that had “tested out”
lead service lines as part of a lead service line replacement program
and then re-exceeded the Action Level. For the purposes of subsequent
lead service line replacement efforts, the previously “tested-out”
lines would go back into the inventory for possible re-testing and/or
replacement. Only a handful of systems are expected to be in this
situation, estimated at 1 system per year. This analysis assumes that
the 1 system is not a small system.  There is no evidence that small
systems would be triggered into this regulatory change cost any more
frequently than other systems. 

Small System Costs

Exhibit 35 summarizes the estimated annual costs per system for three
subcategories of small systems associated with all final regulatory
changes. Exhibit 36 summarizes the one-time costs to small systems for
three system size subcategories.  Total average annual costs to all
small systems less than 10,000 are estimated at $3.8 million, and total
one-time costs to all small systems less than 10,000 are estimated at
$9.5 million.

Exhibit 35: Average Annual Small System Costs by System Size Category 

 	25-500	501-3,300*	3,301-10K*	Average Costs For All Systems Less than
10K*

Regulatory Change #III.A	$30             	$30	$30	$30

Regulatory Change #III.B	$0      	$0	$0	$0

Regulatory Change #III.C	$1,300      	$3,900	$9,400	$2,300

Regulatory Change# III.D	$186      	$207	$255	$200

Regulatory Change #III.E	$15      	$18	$32	$17

Regulatory Change #III.F	$6 ($180)	$7 ($290)	$8 ($1,200)	$7 ($270)

Regulatory Change #III.G	$0      	$0	$0	$0

Average Cost per System	$41	$67	$153	$55

 (4th Qtr 2006$)

Notes:  Totals may not add due to rounding.

*Values in parentheses represent costs when there is an AL exceedance	

Exhibit 36: One-Time Small System Costs by System Size Category

(4th Qtr 2006$)

 	25-500	501-3,300	3,301-10K	Aggregate: 25-10K

III.A	$30	$30	$30	$30

Implementation	$124	$138	$270	$138

Average One-Time Cost per System	$126	$140	$272	$140

Note:  Totals may not add due to rounding.

Average Costs Per Small System

The average compliance cost for all small systems serving fewer than
10,000 people is minimal:  $55 per system in annual costs. However,
there is a fairly wide range in the costs that a system could face. All
systems will incur the $138 one-time implementation cost, but the
additional annual costs could be as low as $0 for small NTNCWSs that
already notify customers of tap monitoring results. Systems that do not
already notify customers of results will incur $17 per year. Small CWSs
will incur $7 per year to include a statement on the CCR. The roughly 2
percent of systems that are making a treatment change or source addition
would incur an additional $196 in the year they make the change. 

At the high end, if a system incurred all annual costs, the total would
be $2,743 per year.  As EPA estimates that only 854 small systems will
exceed the lead action level, at most only 854 small systems, or 1.3
percent of all small systems, could potentially incur all estimated
annual costs.  Those systems that do not exceed the lead action level
face a maximum potential annual cost of $220.

Measuring Significant Economic Impact of Rule Costs

The costs to small systems are compared against average revenues for
small systems from all revenue sources.  Small systems can be one of
three types of small entities – small businesses, small governments,
or small non-profits.  The revenue estimate used for assessing impacts
to small systems in this rule is derived from two sources:  (1) EPA’s
2000 Community Water System Survey (CWSS) and (2) the 2002 Census of
Governments.  Data from these two sources are used to calculate average
total revenue and water revenue for all small systems serving less than
10,000 customers and for each of 3 small system subcategories: those
serving 25-500 customers, those serving 501-3300 customers, and those
serving 3301-10,000 customers.  Analyzing impacts separately for these 3
categories of small systems allows EPA to better identify potential
impacts to the smallest systems, which tend to have the lowest revenues.
 These estimates are shown in Exhibit 37.  A detailed description of the
revenue estimates, and their associated limitations, is shown in
Appendix K of this document.  

For this analysis, EPA assumed that estimates of revenue for NTNCWSs are
the same as those for CWSs of similar size.  In the 1998 report, An
Assessment of the Vulnerability of Non-Community Water Systems to SDWA
Cost Increases, EPA evaluated the affordability of water service to 20
categories of non-community water systems and their ability to absorb
future cost increases relative to residential users of community water
systems.  This report found that all of the non-community water system
categories reviewed were less vulnerable to SDWA-related cost increases
than a typical household served by a community water system.  In each
non-community category, expenditures on water were found to be a
relatively small percentage of total revenues and in nearly all cases,
water expenditures totaled less than 1 percent of total revenue.  Based
on this analysis, EPA believes it is reasonable to use CWS-based revenue
data as a proxy for NTNCWS revenues.  Because these systems may have
larger revenue streams, they are less vulnerable, financially, than CWSs
and can more readily absorb cost increases associated with new drinking
water regulatory requirements.       

Exhibit 37: Revenue Estimates for Small System Size Categories:

Total Revenue and Water Revenue ($2006)

System Size	Total Revenue	Water Revenue

25-500*	$550,000	$30,000

501-3,300	$1,448,000	$220,000

3,301-10K	$12,643,000	$925,000

Aggregate: 25-10K	$2,167,000	$219,000

Source:  2000 CWSS and 2002 Census of Governments

*Note that total revenue for systems serving 25-100 is $220,000 and
water revenue is $12,000. 

Total revenue shown in Exhibit 37 is comprised of data on water sales,
water-related revenue, and non-water revenue.  Water sales consist of
the revenue generated by the sale of water to customers and is generally
based on a rate charged per unit of water sold.  Water-related revenue
consists of fees, penalties, or other charges related to the provision
of water.  Water sales and water-related revenue collectively represent
estimates of Water Revenue as shown in Exhibit 37.

Non-water revenue is another source of funds available to many small
systems.  Examples of non-water revenue are revenues from small
privately owned systems that provide water as an essential part of
another business.  These systems will have revenue from their primary
business and not from the provision of water.  Municipal governments may
also rely on general revenue in addition to or in lieu of water revenue
to finance system operations.  In many cases, non-water revenues are
available to systems to support all or part of system operations;
therefore it is important to include estimates of non-water revenue to
fully account for the resources available to water systems to finance
their operations.     

Exhibit 38 compares the average costs of the regulatory changes to the
average revenues on a per system basis.  As shown below, economic
impacts to small systems from the LCR regulatory revisions are all less
than one percent of revenue for each of the small system size
subcategories.  However, as discussed in Appendix K of this document and
in Section V.C.1 of the final rule, substantial data limitations exist
in our revenue data which may limit our ability to accurately describe
the revenues available to small water systems.

Exhibit 38: Average Costs per System and Percentage of Revenue

ALL REVENUE SOURCES

(2006$)

System Size	Number of Systems	Average Annual Cost per System	Revenues
per System	Average Annual Cost as Percentage of Revenue

25-500	46,551	$41	$550,000	0.007%

501-3,300	16,932	$67	$1,448,000	0.005%

3,301-10K	4,803	$153	$12,643,000	0.001%

Aggregate: 25-10K	68,286	$55	$2,167,000	0.003%

In summary, the costs for each of the small size subcategories below
10,000 represent less than 1 percent of revenue from all sources.  To
provide additional information on the potential economic impacts of the
LCR on small entities, EPA also examined the relationship between costs
and revenues for the smallest system size (those serving 25-500 people).
 Average total annual revenue for this system size is estimated to be
$550,000.  As stated above, the maximum number of small systems (serving
less than 10,000 people) that could possibly incur all annual total
costs of $2,743 is 854, those that exceed the lead action level.  This
maximum cost represents approximately 0.5 percent of average revenues
from all sources for systems in the smallest size subcategory.  However,
because of our limited data on small system revenues, we do not have the
ability to develop a distribution of revenues in this subcategory for
comparison.  For those systems that do not exceed the lead action level,
the maximum potential cost that could be incurred by systems in the
smallest size category is $220, or 0.04 percent of revenue from all
sources.  This analysis further supports our conclusion that this final
rule will not have a significant economic impact on a substantial number
of small entities.

6.4 	Unfunded Mandates Reform Act

	  SEQ CHAPTER \h \r 1 Title II of the Unfunded Mandates Reform Act of
1995 (UMRA), Public Law No. 104-4, establishes requirements for Federal
agencies to assess the effects of their regulatory actions on State,
local, and Tribal governments and the private sector. Under section 202
of the UMRA, EPA generally must prepare a written statement, including a
cost-benefit analysis, for proposed and final rules with "Federal
mandates" that may result in expenditures to State, local, and Tribal
governments, in the aggregate, or to the private sector, of $100 million
or more in any one year. Before promulgating an EPA rule for which a
written statement is needed, section 205 of the UMRA generally requires
EPA to identify and consider a reasonable number of regulatory
alternatives and adopt the least costly, most cost-effective or least
burdensome alternative that achieves the objectives of the rule. The
provisions of section 205 do not apply when they are inconsistent with
applicable law. Moreover, section 205 allows EPA to adopt an alternative
other than the least costly, most cost-effective or least burdensome
alternative if the Administrator publishes with the final rule an
explanation why that alternative was not adopted. Before EPA establishes
any regulatory requirements that may significantly or uniquely affect
small governments, including Tribal governments, it must have developed
under section 203 of the UMRA a small government agency plan. The plan
must provide for notifying potentially affected small governments,
enabling officials of affected small governments to have meaningful and
timely input in the development of EPA regulatory proposals with
significant Federal intergovernmental mandates, and informing,
educating, and advising small governments on compliance with the
regulatory requirements.

  SEQ CHAPTER \h \r 1 EPA has determined that this rule does not contain
a Federal mandate that may result in expenditures of $100 million or
more for State, local, and Tribal governments, in the aggregate, or the
private sector in any one year. The total upfront costs of this action
to States and public water systems are estimated at $12.725 million,
with estimated annual costs to States and public water systems ranging
from $5.9 to $6.3 million. Systems and State/Primacy agencies will incur
one-time upfront costs associated with reviewing and implementing the
overall LCR regulatory changes. For systems, activities include
reviewing the rule changes and communicating requirements to staff. For
States/Primacy agencies, activities include regulation adoption, program
development, and miscellaneous communication with systems. Systems and
States will also incur annual costs consisting of the costs to implement
the regulation. Annual costs to systems include the costs of reporting,
monitoring, and public education. Annual costs to States consist of the
costs of reviewing water system information. Thus, today’s rule is not
subject to the requirements of sections 202 and 205 of the UMRA.

	EPA has determined that this rule contains no regulatory requirements
that might significantly or uniquely affect small governments.  The
regulation applies to all owners/operators of public water systems, not
uniquely to those owners/operators that are small entities, and, for
most systems, requires minimal expenditure of resources. Since these
regulatory revisions affect all system sizes and the impact on the
average small system will be 0.11 percent of revenues, the regulatory
revisions to the LCR are not subject to the requirements of section 203
of UMRA.

	Nevertheless, in developing this rule, EPA consulted with State and
local officials (including small entity representatives) early in the
process of developing the proposed regulation to permit them to have
meaningful and timely input into its development. EPA held five
workshops in 2004-2005 to elicit concerns and suggestions from
stakeholders on various issues related to lead in drinking water. These
workshops covered the topic areas of simultaneous compliance, sampling
protocols, public education, lead service line replacement, and lead in
plumbing. Expert participants from utilities, academia, state
governments, consumer and environmental groups, and other stakeholder
groups participated in these workshops to identify issues, propose
solutions, and offer suggestions for modifications and improvements to
the LCR. These workshops are described in greater detail in previous
sections of this document.   

6.5 	Executive Order 13132:  Federalism

  SEQ CHAPTER \h \r 1 Executive Order 13132, entitled “Federalism”
(64 FR 43255, August 10, 1999), requires EPA to develop an accountable
process to ensure “meaningful and timely input by State and local
officials in the development of regulatory policies that have federalism
implications.”  “Policies that have federalism implications” is
defined in the Executive Order to include regulations that have
“substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government.”  

The final rule does not have federalism implications. It does not have
substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government, as
specified in Executive Order 13132. The rule is consistent with, and
only makes revisions to, the requirements under the current national
primary drinking water regulations for lead and copper. The existing
rule imposes requirements on public water systems to ensure that water
delivered to users is minimally corrosive, to treat source water, remove
lead service lines and provide public education where necessary to
ensure public health protection.   This rule does not make any
significant changes to these requirements, but, as explained elsewhere
in this document, makes revisions and clarifications to the rule’s
requirements to enhance the efficiency and effectiveness of current
requirements.

Nevertheless, EPA did consult with State and local officials early in
the process of developing the proposed regulation as described in
section on the Unfunded Mandates Reform Act.

6.6 	Executive Order 13175:  Consultation and Coordination With Indian
Tribal Governments

Executive Order 13175, entitled “Consultation and Coordination with
Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires
EPA to develop an accountable process to ensure “meaningful and timely
input by tribal officials in the development of regulatory policies that
have tribal implications.”  

  

The final rule does not have tribal implications as specified in
Executive Order 13175. This rule does not significantly or uniquely
affect the communities of Indian Tribal governments, nor does it impose
substantial direct compliance costs on those communities. The provisions
of this rule apply to all community and non-transient non-community
water systems. Tribal governments may be the owners or operators of such
systems, however, nothing in today’s provisions uniquely affects them.
EPA therefore concludes that this rule does not significantly or
uniquely affect the communities of Indian tribal governments. Thus,
Executive Order 13175 does not apply to this rule.  

6.7 	Executive Order 13045:  Protection of Children from Environmental
Health Risks and Safety Risks

	Executive Order 13045: “Protection of Children from Environmental
Health Risks and Safety Risks” (62 FR 19885, April 23, 1997) applies
to any rule that: (1) is determined to be “economically significant”
as defined under Executive Order 12866, and (2) concerns an
environmental health or safety risk that EPA has reason to believe may
have a disproportionate effect on children. If the regulatory action
meets both criteria, the Agency must evaluate the environmental health
or safety effects of the planned rule on children, and explain why the
planned regulation is preferable to other potentially effective and
reasonably feasible alternatives considered by the Agency.

	This final rule is not subject to the Executive Order because it is not
economically significant as defined in Executive Order 12866.  The rule
does not change the core LCR requirements in place to assure the
protection of children from the effects of lead in drinking water,
rather the changes will improve the implementation of these provisions.
Moreover, EPA believes that this action is consistent with Executive
Order 13045 because it further strengthens the protection to children
from exposure to lead and copper via drinking water, as this rule
enhances the implementation of the LCR in the areas of monitoring,
customer awareness, and lead service line replacement. This rule also
clarifies the intent of some unclear provisions in the LCR. These
changes ensure and enhance more effective protection of public health
through the reduction in lead exposure. 

  SEQ CHAPTER \h \r 1   

6.8		Executive Order 13211:  Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use   

	  SEQ CHAPTER \h \r 1 The  final rule is not a “significant energy
action” as defined in Executive Order 13211, “Actions Concerning
Regulations That Significantly Affect Energy Supply, Distribution, or
Use” (66 FR 28355 (May 22, 2001)) because it is not likely to have a
significant adverse effect on the supply, distribution, or use of
energy. The rule provides clarifications and modifications to the
existing LCR rule language only.    

	The final rule does not affect the supply of energy as it does not
regulate power generation. The public and private utilities that are
affected by this regulation do not, as a rule, generate power. The
revisions to the LCR do not regulate any aspect of energy distribution
as the utilities that are regulated by the LCR already have electrical
service. Finally, these regulatory revisions do not adversely affect the
use of energy as EPA does not anticipate that a significant number of
drinking water utilities will add treatment technologies that use
electrical power to comply with these regulatory revisions. As such, EPA
does not anticipate that this rule will adversely affect the use of
energy. 

6.9 	National Technology Transfer and Advancement Act

	  SEQ CHAPTER \h \r 1 Section 12(d) of the National Technology Transfer
and Advancement Act of 1995 (“NTTAA”), Public Law No. 104-113, 12(d)
(15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in
its regulatory activities unless to do so would be inconsistent with
applicable law or otherwise impractical. Voluntary consensus standards
are technical standards (e.g., materials specifications, test methods,
sampling procedures, and business practices) that are developed or
adopted by voluntary consensus standards bodies. The NTTAA directs EPA
to provide Congress, through OMB, explanations when the Agency decides
not to use available and applicable voluntary consensus standards. 

	  SEQ CHAPTER \h \r 1  The final rule may involve voluntary consensus
standards in that it requires additional monitoring for lead and copper
in certain situations, and monitoring and sample analysis methodologies
are often based on voluntary consensus standards.  However, the final
rule does not change any methodological requirements for monitoring or
sample analysis, only, in some cases, the required frequency and number
of samples.  Also, EPA’s approved monitoring and sampling protocols
generally include voluntary consensus standards developed by agencies
such as the American National Standards Institute (ANSI) and other such
bodies wherever EPA deems these methodologies appropriate for compliance
monitoring.



REFERENCES

ADMINISTRATIVE ORDER FOR COMPLIANCE ON CONSENT, Docket No.
SDWA-03-2004-0259DS 

Agency for Toxic Substances and Disease Registry (ATSDR). Toxicological
Profile for Lead. U.S. Department of Health and Human Services. July
1999

Centers for Disease Control (CDC). Surveillance for Elevated Blood Lead
Levels Among Children- United States 1997-2001. Centers for Disease
Control and Prevention. Surveillance Summaries, September 12, 2003. MmWR
2003:52 (No. SS-10).

Cubed, M for the National Child Care Association, The National Economic
Impacts of the Child Care Sector, Fall 2002.

District of Columbia Water and Sewer Authority. General Overview.
November 2005.   HYPERLINK
"http://www.dcwasa.com/about/gen_overview.cfm" 
http://www.dcwasa.com/about/gen_overview.cfm 

District of Columbia Water and Sewer Authority. Lead Service Line
Replacement Program Annual Report for 2003. September 2003.

District of Columbia Water and Sewer Authority. 2004 DRINKING WATER
QUALITY REPORT. 2004.

Grumbles, B. Witness Testimony. Tapped Out? Lead in the District of
Columbia and the Providing of Safe Drinking Water. Subcommittee on the
Environment and Hazardous Materials, July 22, 2004.

HDR/EES. Forensic Analysis of Elevated Lead Levels in District of
Columbia Water and Sewer Authority Drinking Water: Task 5 Data Summary
(Draft). June 1, 2005.

United States Census Bureau, U.S. Summary: 2000 (Census 2000 Profile).
July 2002.   HYPERLINK
"http://www.census.gov/prod/2002pubs/c2kprof00-us.pdf" 
http://www.census.gov/prod/2002pubs/c2kprof00-us.pdf .

United States Census Bureau, Statistical Abstract of the United States:
2006. http://www.census.gov/prod/2005pubs/06statab/health.pdf.

United States Environmental Protection Agency. Final Regulatory Impact
Analysis of National Primary Drinking Water Regulations for Lead and
Copper. April 1991.

 

United States Environmental Protection Agency. Regulatory Impact
Analysis Addendum: Proposed Changes to National Primary Drinking Water
Regulations for Lead and Copper. January 1996. 

United States Environmental Protection Agency.  An Assessment of the
Vulnerability of Non-Community Water Systems to SDWA Cost Increases. 
September 1998.

United States Environmental Protection Agency. Information Collection
Request: National Primary Drinking Water Regulations For Lead and
Copper. June 1999.

United States Environmental Protection Agency. Economic Analysis for the
Filter Backwash Recycling Rule. EPA 816-R-01-20. July 2001.

United States Environmental Protection Agency. Lead and Copper
Monitoring Guide. February 2002.

United States Environmental Protection Agency. Summary, Lead Action
Level exceedances for public water systems subject to the Lead and
Copper Rule (For data through September 13, 2004). 2004.

United States Environmental Protection Agency. Information Collection
Request for  

Disinfectants/Disinfection Byproducts, Chemical, and Radionuclides
Rules, OMB Control Number: 2040-0204, EPA Tracking Number: 1896.05. 2004

United States Environmental Protection Agency, Public Water System
Supervision Information Collection Request, July 2004.

United States Environmental Protection Agency. FACTOIDS: Drinking Water
and Ground Water Statistics for 2004.
http://www.epa.gov/safewater/data/pdfs/data_factoids_2004.pdf. 

United States Environmental Protection Agency. Notes from the EPA Lead
Service Line Replacement Workshop. December 10, 2004.   HYPERLINK
"http://www.epa.gov/safewater/lcrmr/pdfs/summary_lcmr_review_lead_line_r
eplacement_workshop_10-26-04.pdf" 
http://www.epa.gov/safewater/lcrmr/pdfs/summary_lcmr_review_lead_line_re
placement_workshop_10-26-04.pdf 

United States Environmental Protection Agency. Summary of Lead Action
Level Exceedances. January 2005.   HYPERLINK
"http://www.epa.gov/safewater/lcrmr/lead_data.html" 
http://www.epa.gov/safewater/lcrmr/lead_data.html 

United States Environmental Protection Agency. Lead 90th Percentile
Levels for 166 Large Water Utilities - Then and Now. January 2005.  
HYPERLINK
"http://www.epa.gov/safewater/lcrmr/reductionplan_comparison.html" 
http://www.epa.gov/safewater/lcrmr/reductionplan_comparison.html 

United States Environmental Protection Agency. Consumer Factsheet on:
LEAD. March 4, 2005. http://www.epa.gov/safewater/lcrmr/lead.html 

United States Environmental Protection Agency. Information Collection
Request for Contaminant Occurrence Data in Support of EPA's Second Six
Year Review of National Primary Drinking Water Regulations. Draft. June
2005.

United States Environmental Protection Agency. State Responses to EPA
Survey on State Implementation. November 2005.

United States Environmental Protection Agency. Economic Analysis for the
Final Stage 2 Disinfectants and Disinfection Byproducts Rule. EPA
815-R-05-010.  December 2005



Appendix A

Derivation of State Labor Rates

 Appendix A-1: State Labor Rate for Economic Analysis

2007 Salaries and Overhead Costs from ASDWA State Resource Model

From Exhibit A02, Draft Six-Year 2 ICR, August 2006

State Size (a) 	Professional Staff 	Support Staff 	Hourly Average: 80%
Prof and 20% Support 	Hourly Rate (adjusted for overhead at 23%) 	Number
of States/

Territories	Weighted Average State Labor Rate (2007)

	(adjusted for Fringe benefits at 22% of base salary)

Very Small (applies to 9 States, including VI, GU, AS, NM) 	$62,720 
$41,960 	$32.54 	$40.02 	9	$360.18 

Small applies to 12 States, including DC and PR)	$62,917 	$36,470 
$32.02 	$39.38 	12	$472.56 

 Medium (applies to 23 total) 	$67,274 	$41,297 	$34.49 	$42.42 	23
$975.66 

Large (applies to 10 total) 	$75,950 	$54,897 	$39.86 	$49.02 	10
$490.20 

Very Large (applies to 2 total) 	$111,800 	$59,908 	$56.35 	$69.30 	2
$138.60 

 	 	 	 	 	56	$2,437.20 

Weighted Average -- All States and Territories	 	 	 	 	 	$43.52 

(a) State labor costs are from the "2001 ASDWA Drinking Water Program
Resource Needs Self Assessment". In 2000, the United States General
Accounting Office used a previous version of this model to estimate
nationwide drinking water program needs for Congress. The tool was later
updated and improved based on comments from 27 States. To make the model
easier to use, ASDWA established suggested salary and benefit ranges
(i.e., default values), resource needs for the various NPDWRs, and other
key variables. These hourly estimates are based on the default annual
rates for 2007 that are provided in the model. The model assumes 1,800
work hours per full-time equivalent employee. Hourly rate labor costs
are adjusted to account for fringe benefits (i.e., holidays, sick days,
vacation, pension, health, dental, and life insurance); and overhead
(i.e., office space, furniture, utilities, copiers, fax machines,
postage, basic computing needs, etc.).

Appendix B

Derivation of System Labor Rates

Appendix B-1: Derivation of System Labor Rates

		Labor costs for systems were taken from the report Labor Costs for
National Drinking Water Rules prepared by SAIC in October 2003 for
EPA’s Office of Ground Water and Drinking Water.  Exhibits 20 and 21
of that report summarized recommended average technical wage rates and
average managerial wage rates by system size for EPA to use in cost
analyses.  These rates are summarized below.

Wage Rates from SAIC Study:  From Exhibits 20 and 21

	 	Loaded Wage Rate 

(2003 $)	Loaded Wage Rate 

(2006 4th Qtr $)	Combined Wage Rate (2006 4th Qtr $)

System Size	Technical	Managerial	Technical	Managerial	Combined

25-100	$21.44 	$44.36 	$23.86 	$49.37 	$23.86 

101-500	$23.09 	$47.78 	$25.70 	$53.18 	$25.70 

500-3.3k	$24.74 	$51.20 	$27.54 	$56.99 	$27.54 

3.3k-10k	$25.34 	$51.20 	$28.20 	$56.99 	$33.96 

10k-100k	$26.05 	$51.20 	$28.99 	$56.99 	$34.59 

>100k	$31.26 	$51.20 	$34.79 	$56.99 	$39.23 

Average:	 	 	$28.18 	 	$30.81 

Average Small (<10k):	 	 	 	 	$27.76 

	Source: Labor Costs for National Drinking Water Rules, SAIC, October
24, 2003.

	These loaded wage rates are updated to a fourth quarter 2006 level
using the Employment Cost Index for wages and salaries in utilities
(based on the NAICS classification system).  The index value is 93.0 for
the first quarter of 2003 and 103.5 for the fourth quarter of 2006,
resulting in a factor of 1.113.  To represent the composition of staff
at PWSs of smaller sizes (e.g., systems serving fewer than 3,300
people), EPA uses only the technical rate. For systems serving 3,300 or
more people, EPA uses a ratio of 80 percent technical labor to 20
percent managerial labor to arrive at a weighted labor rate of $33.96
for systems serving 3,301-10,000 people, $34.59 for systems serving
10,001-100,000 people, and $39.23 for systems serving greater than
100,000 people. 



Appendix C

Derivation of Direct Costs for Regulatory Change III.C

Appendix C-1: Percent of Systems on Reduced Monitoring 

State	# CWS and NTNCWS (1)	% Systems on Reduced Monitoring	# CWS and
NTNCWS on Reduced Monitoring

AK	656	51%	335

AL	650	99%	644

AR	768	95%	730

AS	22	0%	0

AZ	986	95%	937

CA	4541	100%	4,541

CO	993	88%	874

CT	1244	85%	1,057

DC	6	100%	6

DE	331	75%	248

FL	2890	97%	2,803

GA	1931	93%	1,796

GU	12	100%	12

HI	128	99%	127

IA	1286	90%	1,160

ID	996	90%	896

IL	2197	100%	2,197

IN	1526	87%	1,328

KS	963	98%	944

KY	467	98%	458

LA	1290	100%	1,290

MA	773	78%	603

MD	1075	76%	820

ME	768	90%	691

MI	3069	100%	3,069

MN	1528	90%	1,375

MO	1704	98%	1,670

MS	1265	85%	1,075

MT	903	80%	722

Navajo	157	38%	60

NC	2740	92%	2,507

ND	349	100%	349

NE	794	97%	770

NH	1142	95%	1,085

NJ	1477	97%	1,433

NM	792	100%	792

Nmar	111	100%	111

NV	359	90%	323

NY	3573	90%	3,216

OH	2288	75%	1,716

OK	1255	70%	879

OR	1211	90%	1,090

PA	3348	89%	2,980

PR	523	100%	523

RI	161	70%	113

SC	830	92%	764

SD	495	95%	470

TN	727	98%	712

TX	5274	90%	4,747

UT	514	88%	452

VA	1865	90%	1,679

VI	235	100%	235

VT	669	88%	589

WA	2589	100%	2,589

WI	1993	80%	1,594

WV	690	90%	621

WY	363	93%	338

TOTAL	71,492

65,142

Notes:

(1) System inventory from 4th Quarter 2004 SDWIS Fed data pull.  System
totals do not include 703 systems in Regions and 18 systems in PW.
(71,492 + 703 + 18 = 72,213 total systems).

Findings: 65,142 of 71,492 CWS and NTNCWS systems are on reduced
monitoring which is equivalent to 91 percent of these systems

Data source: USEPA Survey of States - Questions on State Implementation
of Lead and Copper Rule. July 2004.

For states that did not respond to survey, assume 100 percent systems on
reduced monitoring.

Appendix C-2: Derivation of estimates of system labor for tap
monitoring

Unlike most drinking water regulations that require sampling at entry
points to the distribution system, the LCR requires that tap water
samples be collected at kitchen or bathroom taps of residences and other
buildings to capture the impact of distribution system and household
plumbing materials on drinking water lead and copper levels. This
requirement significantly complicates sample collection, requiring that
water systems identify potential customers to monitor based on a tiered
system, recruit those customers to participate, and coordinate with
these customers to collect tap samples. Procedures associated with lead
and copper tap sampling include collecting a 1-liter first draw sample
from a tap regularly used for consumption where the water has stood in
the pipes for at least 6 hours (e.g., no flushing, showering, etc.).
Residents may collect samples, but they must follow specific
instructions as to the sample collection procedures. Systems then
analyze the samples for lead and copper content, calculate the 90th
percentile value for the system to assess compliance, and report the
results to the State.

Sample Collection

	

	In order to collect drinking water samples from customer sites to
conduct compliance monitoring for the LCR, systems undertake the
following activities:

Identification of potential monitoring locations based on the Tier
system in the LCR,

Recruitment of customers at the locations to voluntarily participate in
sampling,

Distribution of sample materials and instructions,

Coordination with customers during sampling to remind them and answer
questions,

Collection of samples from customer locations, and

Review of samples and validation that appropriate collection procedures
have been followed.

The labor required by systems to conduct lead and copper tap sampling to
assess compliance with the LCR has been estimated previously by several
EPA studies. The April 1991 “Final Regulatory Impact Analysis of
National Primary Drinking Water Regulations for Lead and Copper”
estimates that it takes 2 hours for public water system personnel to
arrange for and collect each lead and copper sample.

These estimates have been refined since the 1991 RIA for the LCR. The
June 1999 Information Collection Request states that “sample
collection (the labor required for travel, gaining access to the
sampling station, and sample collection) takes 2.5 hours per
sample…”  The estimate of 2.5 hours per sample for lead and copper
tap sampling collection is also used in the 2004 ICR and, in the absence
of new information, has been applied in this analysis.

Sample Analysis

	The cost to analyze a compliance sample for lead and copper is based on
the fee charged by certified commercial laboratories.  This fee includes
both the cost of labor and materials.  The June 1999 ICR assumed a
commercial fee of $30 to analyze a sample for lead and copper.  Updated
to current dollars (4th Qtr 2006), the fee is estimated at $36.34 per
sample.  To validate that the updated analysis fee is reasonable,
publicly available estimates of costs were collected as displayed in the
following table.

Source	Fee for Lead and Copper Analysis of Drinking Water	Citation

US EPA	$20 - $100	http://www.epa.gov/safewater/lead/leadfacts.html

NY State DOH	$15 - $50
http://www.health.state.ny.us/nysdoh/lead/leadwtr.htm

CWLTI 

(non profit in NC)	$24 – lead only

$30 lead and copper	http://www.leadtesting.org/orderonline.htm

Hometips.com	$35 – lead only	http://www.hometips.com/help/wat5.html

Fairfax Water	$35 per faucet	http://www.fcwa.org/water/lead.htm

The updated estimate of $36.34 per sample for lead and copper is well
within the range provided by the USEPA and the NY State Department of
Health.  It is also very close to the $35 that one system charges for
lead testing (Fairfax Water) and the estimate from a home advice website
from two national laboratories (National Testing Labs and Suburban Water
Testing).

	Based on OMB guidance in order to be consistent with estimates for
other drinking water rules, the June 1999 ICR assumes that all analysis
is conducted in-house for utilities, requiring that the commercial fee
be broken into its labor component and materials component.  The labor
required to analyze each sample is estimated at 1 hour, based on the use
of the ICP-MS (200.8) method.  The average technical labor rate for 1
hour of technical labor is estimated in the following table.

Size Category	Labor for 1 Hr

<= 100	$23.86 

101 to 500	$25.70 

501 to 3,300	$27.54 

3.3K-10K	$28.20 

10K-100K	$28.99 

>100K	$34.79 

Mean	$28.18 

The materials cost associated with analyzing a compliance sample for
lead and copper can then be estimated by subtracting the labor component
of $28.18 from the total fee of $36.34, for an estimate of $8.16
materials cost per sample.

Sample Reporting: Calculation of 90th Percentile

	To assess compliance with the LCR Action Levels, systems must calculate
the 90th percentile of the lead and copper samples.  Activities
associated with determining compliance include the following:

Collection of sampling results,

Validation that all appropriate samples are included,

Arrangement of samples by rank order, and

Determination of the 90th percentile value.

The burden to calculate the 90th percentile levels from monitoring
results is estimated as follows in the June 1999 ICR:

System Size	Burden Estimate

<= 100	0.5 hours

101-500	0.5 hours

501-10K	0.5 hours

10-100K	0.75 hours

>100K	1 hour

These estimates are also used in the 2004 ICR and, in the absence of new
information, have been applied in this analysis.

Sample Reporting: Reporting Results to State

Systems are required to report the results of the LCR compliance
monitoring to the State.  Activities associated with reporting results
to States include the following:

Assembly and organization of monitoring results and compliance
calculations, 

Completion of required certifications, and 

Preparation of the cover letter to the State.

The June 1999 ICR estimates that all systems will incur 1 hour to
conduct these activities related to reporting results to States.  The
materials cost for State reporting is the cost of one postage stamp --
$0.39.  These estimates are also used in the 2004 ICR and, in the
absence of new information, have been applied in this analysis.

Sample Reporting: Total

	The total labor associated with reporting compliance monitoring results
to the State, including the calculation of the 90th percentile, is
summarized in the following table.  An additional materials cost of
$0.39 is also applied.

System Size	Burden Estimate

<= 100	1.5 hours

101-500	1.5 hours

501-10K	1.5 hours

10-100K	1.75 hours

>100K	2 hours

Appendix C-3: Estimates of labor for State review of tap monitoring
results per monitoring event

System Size	State Burden to Review Tap Monitoring Letter	State Burden to
Check Compliance Calculations

<= 500	1.0	10 minutes

501 to 3,300	1.0	15 minutes

3.3K-10K	1.0	30 minutes

10K-50K	1.0	45 minutes

50K-100K	1.0	45 minutes

>100K	1.0	1 hour

Notes:

Data Source: Information Collection Request: Disinfectants/Disinfection
Byproducts, Chemical, and Radionuclides Rules, USEPA, Office of Water,
September 2004, page H-12.

Appendix C-4: Regulatory Change III.C System Reporting Cost (4th Qtr
2006$)

System Size Category	# Systems that Exceed Lead AL [1,2]	# Systems
Affected by Regulatory Change [3]	Total Additional # Monitoring Events
Due to Regulatory Change [4]	System Reporting Burden (Hrs.) Per
Monitoring Event [5]	Total System Reporting Burden (Hrs.) [6]	Total
Labor Cost [7]	Annual Labor Cost [8]	Total O&M Cost [9]	Annual O&M Cost
[10]	Total Annual Costs

25-100	402	366	1,830	1.5	2,745	$65,496	$21,832	$787	$262	$22,094

101-500	298	271	1,355	1.5	2,033	$52,235	$17,412	$583	$194	$17,606

501-3,300	184	167	835	1.5	1,253	$34,494	$11,498	$359	$120	$11,618

3.3K-10K	55	50	250	1.5	375	$12,734	$4,245	$108	$36	$4,281

10K-50K	41	37	185	1.75	324	$10,994	$3,665	$80	$27	$3,691

50K-100K	7	6	30	1.75	53	$1,816	$605	$13	$4	$610

>100K	7	6	30	2	60	$2,354	$785	$13	$4	$789

Total	994	903	4,515	--	6,841	$180,123	$60,041	$1,941	$647	$60,688

Notes:

1.  Assume 884 CWS and NTNCWS serving <3,300 people exceed the lead AL
each year based on SDWIS/Fed database for monitoring period ending after
January 2003.  (Data source: USEPA Survey of States - Questions on State
Implementation of Lead and Copper Rule. July 2004).

2.  For systems serving >3,300 people, the # systems is based on systems
that have exceeded the lead action level since 2003. data source:
www.epa.gov/safewater/lcrmr/lead-data.html, 8/30/05. 

3.  Of CWS and NTNCWS that exceed the lead action level, assume 91% of
these systems are on reduced monitoring based on USEPA Survey of States
July 2004. 

4.  Total additional monitoring events in the 3 year period 2005-2007 is
the total monitoring events for standard monitoring (6 periods in 3
years) less reduced monitoring (1 period per 3 years) multiplied by the
number of systems.   Assume each system was operating on a reduced
monitoring schedule (once per 3 years) when the AL was exceeded; "total"
means total for 3 year period.

5.  Based on 1999 ICR Page H-27 Assumptions of Reporting Burden for Tap
Sample Letter and Tap Sample Calcs.

6.  Total system reporting burden equals the system reporting burden per
monitoring event multiplied by the additional monitoring events.

7.  Wage rates from SAIC contract study, "Labor Costs for National
Drinking Water Rules" (2003) updated to 4th Qtr 2006. Total labor cost
equals hourly labor rate multiplied by total burden.

8.  Annual labor cost equals total labor costs divided by 3.

9.  Total O&M costs include 1 postage stamp @ $0.39, plus $.04 for
materials per monitoring event.

10.  Annual O&M cost equals total O&M costs divided by 3.

Appendix C-5: Regulatory Change III.C System Tap Water Monitoring Costs
(Lead and Copper Monitoring) (4th Qtr 2006$)

System Size Category	# Systems that Exceed Lead AL [1,2]	# Systems
Affected by Regulatory Change [3]	Total Additional # Tap Samples Due to
Regulatory Change [4]	Total Burden for Sample Collection and Analysis
(Hrs) [5]	Total Labor Cost [6]	Annual Labor Cost [7]	Total O&M Cost [8]
Annual O&M Cost [9]	Total Annual Cost

<= 100	402	366	9,150	32,025	$764,117	$254,706	$74,664	$24,888	$279,594

101 to 500	298	271	14,905	52,168	$1,340,705	$446,902	$121,625	$40,542
$487,443

501 to 3,300	184	167	18,370	64,295	$1,770,684	$590,228	$149,899	$49,966
$640,195

3.3K-10K	55	50	11,000	38,500	$1,307,383	$435,794	$89,760	$29,920
$465,714

10K-50K	41	37	12,210	42,735	$1,451,195	$483,732	$99,634	$33,211	$516,943

50K-100K	7	6	1,980	6,930	$239,709	$79,903	$16,157	$5,386	$85,289

>100K	7	6	3,300	11,550	$453,107	$151,036	$26,928	$8,976	$160,012

Total	994	903	70,915	248,203	$7,326,899	$2,442,300	$578,666	$192,889
$2,635,188

Notes:

1.  Assume 884 systems serving <3,300 people exceed the lead AL each
year based on SDWIS/Fed database for monitoring period ending after
January 2003.  (Data source: USEPA Survey of States - Questions on State
Implementation of Lead and Copper Rule. July 2004).

2.  For systems serving >3,300 people, the # systems is based on systems
that have exceeded the lead action level since 2003. data source:
www.epa.gov/safewater/lcrmr/lead-data.html, 8/30/05. 

3.  Of systems that exceed the lead action level, assume 91% of these
systems are on reduced monitoring based on USEPA Survey of States July
2004. 

4.  Assume systems required to change from reduced monitoring schedule
(one monitoring period per 3 years) to standard monitoring (monitoring
every 6 months).  "total" means total samples per 3 year period. 
Sampling schedule based on system size as summarized in Table 5.2.a
below. For example, systems serving between 101 and 500 people are
required  to monitor 10 sites for standard monitoring and 5 sites for a
reduced monitoring schedule.  Since there are 271 systems in this
category that are on reduced monitoring, the total additional number of
tap samples to be collected in each 3 year period equals
(10x6x271)-(5*1*271) or 14,905.

5.  Assume 3.5 hours average labor for collection and analysis per
sample (source: ICR, page H-43).

6.  Wage rates from SAIC contract study, "Labor Costs for National
Drinking Water Rules" (2003) updated to 4th Qtr 2006

7.  Annual cost equals total costs divided by 3.

8.  Use average O&M cost per sample $8.16 as described in document,
"Derivation of estimates for tap monitoring"Appendix C-6:  Sampling
Schedule per 40 CFR 141.86c

 

System size	Standard Monitoring

# Sites	Reduced Monitoring

# Sites

<= 100	5	5

101 to 500	10	5

501 to 3,300	20	10

3,301 to 10,000	40	20

10,001 to 100,000	60	30

>100,000	100	50

Appendix C-7: Regulatory Change III.C State Review Costs (4th Qtr
2006$)

System Size Category	# Systems that Exceed Lead AL [1,2]	# Systems
Affected by Regulatory Change [3]	Total Additional Tap Monitoring Events
Due to Regulatory Change [4]	Total State Review Burden (Hrs.) [5]	Total
Labor Cost [6]	Annual Labor Cost [7]	Total O&M Cost [8]	Annual O&M Cost
[9]	Total Annual Costs

<= 500	700	637	3,185	3,726	$162,180	$54,060	$1,917	$639	$54,699

501 to 3,300	184	167	835	1,044	$45,425	$15,142	$503	$168	$15,309

3.3K-10K	55	50	250	375	$16,321	$5,440	$151	$50	$5,490

10K-50K	41	37	185	324	$14,090	$4,697	$111	$37	$4,734

50K-100K	7	6	30	53	$2,285	$762	$18	$6	$768

>100K	7	6	30	60	$2,611	$870	$18	$6	$876

Total	994	903	4,515	5,581	$242,913	$80,971	$2,718	$906	$81,877

Notes:

1.  Assume 884 systems serving <3,300 people exceed the lead AL each
year based on SDWIS/Fed database for monitoring period ending after
January 2003.  (Data source: USEPA Survey of States - Questions on State
Implementation of Lead and Copper Rule. July 2004).

2.  For systems serving >3,300 people, the # systems is based on systems
that have exceeded the lead action level since 2003. data source:
www.epa.gov/safewater/lcrmr/lead-data.html, 8/30/05. 

3.  Of systems that exceed the lead action level, assume 91% of these
systems are on reduced monitoring based on USEPA Survey of States July
2004. 

4.  For the 3 year period, 2005-2007, assume systems have 5 additional
tap monitoring events due to switching from a reduced monitoring
schedule (once in 3 years) to standard monitoring (every 6 months).
Refer to Table 5.1 above.

5.  Use 2004 ICR Estimates of State burden on page H-12.  The ICR
estimates state burden to be 1 hour to review sample letter and between
0.17 hours and 1 hour to review sample calculations, depending on system
size.

6.  Use state labor rate of $43.52/hour (Source: Information Collection
Request for Contaminant Occurrence Data in Support of EPA's Second Six
Year Review of National Primary Drinking Water Regulations (August
2006)).

7.  Annual cost equals total cost divided by 3.

8.  Unit O&M cost per event is $0.43 per letter (postage & materials)
per 2004 ICR page H-12.  Assume state sends one letter to utility for
each tap monitoring event and two additional letters to each utility
regarding WQP monitoring.Appendix D

Derivation of Direct Costs for Regulatory Change III.DAppendix D-1:
State responses on review and approval of treatment or source changes

State	No Requirement	Inform	Review & Approval (explicit)	Plan Submittal
Permit	No Response	# CWS and NTNCWS in States without explicit
review/approval process	# CWS in States without explicit review/approval
process

AK

	Yes

	AL

Yes

	650	619

AR

Yes

	768	728

AS

	Yes

	AZ

	Yes

	CA

	Yes

4541	4541

CO

Yes

	993	830

CT

	Yes

	DC

Yes	6	3

DE

Yes

	331	331

FL

Yes

	2890	1881

GA

	Yes

	GU

Yes	12	10

HI

Yes

	128	115

IA

	Yes

	ID

Yes

	996	752

IL

	Yes

2197	1792

IN

Yes

	1526	840

KS

Yes

	963	911

KY

	Yes

	LA

	Yes

	MA

	Yes

	MD

Yes

	1075	502

ME

Yes

	768	399

MI

	Yes

	MN

Yes

	1528	965

MO

Yes

	1704	1463

MS

Yes

	1265	1170

MT

	Yes

	Navajo

Yes

	157	154

NC

Yes

	2740	2174

ND

Yes

	349	320

NE

Yes

	794	606

NH

Yes

	1142	698

NJ

	Yes

1477	607

NM

Yes	792	645

Nmar

Yes	111	79

NV

	Yes

359	253

NY

	Yes

	OH

Yes

	2288	1318

OK

Yes

	1255	1135

OR

Yes

	1211	874

PA

	Yes

3348	2135

PR

Yes	523	467

RI

	Yes

161	83

SC

	Yes

	SD	Yes

495	467

TN

	Yes

	TX

Yes

	5274	4489

UT

Yes

	514	451

VA

	Yes

1865	1263

VI

Yes	235	98

VT

	Yes

669	435

WA

Yes

	2589	2274

WI

Yes

	1993	1086

WV

	Yes

690	536

WY

Yes

	363	276

Total	1	19	14	8	9	6	53,372	40,499

Appendix D-2: Systems changing treatment in response to upcoming
regulations

 In an effort to verify the reasonableness of the assumption that 2
percent of systems will report a treatment change or addition of a new
source each year, a review of the number of systems that are expected to
change treatment due to upcoming drinking water regulation was
conducted. Over the next several years, systems will be faced with new
regulatory requirements that could result in treatment changes,
including changes to comply with the already promulgated Arsenic Rule
and the upcoming Long Term 2 Surface Water Treatment Rule, the Stage 2
Disinfectants/Disinfection Byproducts Rule, and the Groundwater Rule. We
use estimates of the number of systems that are projected to change
treatments to comply with three Rules (Arsenic, LT2 and Stage 2) as a
reasonableness check on the assumption about the number of systems that
will submit treatment or sources changes for review under the LCR. 

Arsenic – 4,100 systems (Data source: Arsenic in Drinking Water EA,
pp. 6-25, 6-27;

LT2 –2,882 systems (Data source: USEPA, Office of Water, Economic
Analysis for the

Final Long Term 2 Enhanced Surface Water Treatment Rule, EPA
815-R-06-001, December 2005. Exhibit 6-1, page 6-3);

Stage 2 D/DBP – 2,261 systems (Data source: USEPA, Office of Water,
Economic Analysis for the Final Stage 2 Disinfectants and Disinfection
Byproducts Rule, EPA 815-R-05-010, December 2005, Exhibit ES-7a, page
ES-17).

Together, these regulatory requirements are estimated to cause 9,243
systems to institute a treatment change, although not all of these
treatment changes will impact corrosion control. The Stage 2 and LT2
treatment changes are projected to take place within a 6 year compliance
period for large systems (with the possibility of 2-year extension) and
8 years for small systems (with the possibility of 2-year extension)
according to page ES-5 of the Stage 2 EA and page ES-6 of the LT2 EA.
The period of compliance for the Arsenic rule is 5 years. Depending on
the range of years for compliance periods for the LT2 and Stage 2 Rules
(6-8 years), approximately 1,400 – 1,600 systems may change treatment,
although not all of these changes will impact corrosion control. 

To account for these expected treatment changes, and to account for
treatment changes unrelated to arsenic, LT2, and Stage 2 rule, EPA
assumed (based on the projected rule-related treatment changes and
expert judgment) that approximately 20% of the systems affected by the
LCR will institute a treatment change in the next ten years.  It is
assumed that these changes occur uniformly over that 10-year period, so
that approximately one-tenth of these systems (or 2 percent of the
total) institute a treatment change each year.  

Using the 2 percent estimate, 1,067 (53,372 X .02) systems each year
would report a treatment change or source addition and incur costs in
that year in States currently not covered by an explicit review and
approval program. The estimate for the number of systems is 552 if
States with a permitting or plan approval process are also excluded.

Appendix D-3: Regulatory Change III.D System Review Costs (4th Qtr
2006$)

 	High Estimate	Low Estimate

# CWS and NTNCWS Affected by Reg Change III.D1 Each Year:	1,067	1,067

Total System Burden (Hrs.)2	8,005.80	8,006

# CWS Affected by Reg Change III.D Each Year3	810	810

# CWS That Must Conduct an Engineering Study Each Year4	25.92	12.96

Annual Cost5	$765,083	$505,883

Notes:

1.  The number of CWS and NTNCWS affected by Regulatory Change III.D is
based on the USEPA Survey of States Questions on State Implementation of
Lead and Copper Rule (July 2004). Survey results show that 14 States
explicitly require review and approval of potential effects of treatment
changes on corrosion control.  53,372 systems in States other than these
14 States would be  affected by this Regulatory Change. It is assumed
that each year 2% of systems have a treatment or source change that
requires review and approval (per the 1999 ICR, page B-8).  Therefore
the number of systems to be affected by this regulatory change each year
is estimated to be 53,372 x 0.02 =  1,067 systems.

2.  It is assumed that all systems will each spend 8 hours to prepare a
submittal letter, coordinate with State, and participate in a meeting
with the State primacy agency. The current system of notification for
treatment changes requires a burden of 0.5 hour (per 1999 ICR) so this
is    deducted from the 8 hours for a total of 7.5 hours per system. The
burden assumption is based on consensus of expert panelists on 11.21.05.

3. The number of CWS affected by Reg Change III.D is based on survey
results from the USEPA Survey of States Questions on State
Implementation of the LCR (July 2004) as described in Notes 1 and 2. The
number of CWS for each State affected by Reg Change III.D was determined
using the USEPA "Factoids: Drinking Water and Groundwater Statistics for
2004". It is assumed that each year 

2% of systems have a treatment or source change that requires review and
approval (per the 1999 ICR, page B-8).  Therefore the most conservative
estimate is 40,499 CWS x 0.02 = 810 CWS and the conservative estimate is
21,080 CWS x 0.02 = 422 CWS.

4.  Assume that 10 to 20 percent of medium and large systems must
conduct an engineering study due to Reg Change III.D based on consensus
agreement of expert panelists on 11.21.05. Since 99 percent of NTNCWS
are small systems (serving <3,300 people), it is assumed that only
medium and large CWSs must conduct an engineering study.  Assume 16% of
CWS are medium or large systems based on the USEPA "Factoids: Drinking
Water and Groundwater Statistics for 2004". For the most conservative
estimate assume that 20% medium and large systems conduct an engineering
study.  For the conservative estimate, assume that 10% conduct
engineering studies.  Therefore, the most conservative estimate equals
810 CWS x 0.16 x 0.20 = 26 systems.  The conservative estimate equals
422 CWS x 0.16 x 0.10 = 7 systems.

5.  Annual cost is equal to the total system burden (hours) multiplied
by a labor rate of $30.81 per hr. (average of wage rates from SAIC
contract study, "Labor Costs for National Drinking Water Rules" (2003)
updated to 4th Qtr 2006 plus $20,000 for an engineering study for a
subset of medium and large CWS.

Appendix D-4: Regulatory Change III.D State Review Costs (4th Qtr
2006$)

 	

High Estimate	Low Estimate

# Systems Affected by Reg Change III.D1:	1,067	1,067

State Burden (Hrs.)2	8,006	3,736

Annual Labor Cost3	$348,424	$162,598

Notes:

1.  The number of systems affected by Regulatory Change III.D is based
on the USEPA Survey of States Questions on State Implementation of Lead
and Copper Rule (July 2004). Survey results show that 14 States
explicitly require review and approval of treatment changes.  53,372
systems in States other than these 14 States would be affected by this
Regulatory Change.  It is assumed that each year 2% of systems have a
treatment or source change that requires review and approval (per the
1999 ICR, page B-8).  Therefore the number of systems to be affected by
this regulatory change each year is estimated to be 53,372 x 0.02 = 
1,067 systems.

2. For the most conservative estimate, it is assumed that States spend 8
hours to review each system's data/reports, coordinate with system and
make approval decision and formalize with management. For the
conservative estimate, it is assumed that States spend 4 hours per
system for the same activities.  These estimates are based on a
consensus agreement of expert panelists on 11.21.05. The current  system
of notification for treatment changes requires a State burden of 0.5
hour (per 1999 ICR); therefore, the most conservative estimate for new
state burden is 7.5 hours and the conservative estimate is 3.5 hours per
system. 

3.  Use state labor rate of $43.52/hour (Source: Information Collection
Request for Contaminant Occurrence Data in Support of EPA's Second Six
Year Review of National Primary Drinking Water Regulations (August
2006)).

Appendix E

Derivation of Direct Costs for Regulatory Change III.E



Appendix E-1:  Derivation of the Number of Systems That Do Not Notify
Customers of Tap Monitoring Results (III.E)

	As part of EPA’s review of the Lead and Copper Rule, States and
primacy agencies were asked a variety of questions dealing with the
implementation of the LCR. Several questions dealt with the issue of
whether systems provide customers (i.e., homeowners or other drinking
water consumers) who participate in lead tap sampling with the results
of that sampling. The responses to these questions are used as a basis
for estimating how many systems currently provide lead sampling results
to customers and will therefore not incur additional costs due to
regulatory change III.E.

Primacy agencies were asked the following question:

“Although not required by Federal regulation, do systems provide
homeowners with lead sampling results derived from any volunteer
sampling program?  Does the state make any recommendations to public
water systems in this area?”

	We focused our analysis on answering three questions:

Are systems required to notify homeowners with lead sampling results
derived from any volunteer sampling program? 

Do States encourage systems to notify homeowners with lead sampling
results derived from any volunteer sampling program?

Do homeowners receive notification of lead sampling results derived from
any volunteer sampling program?

44 States indicated whether the notification of testing results to
households was required by State law. The response of each State is
summarized in Table E-1.

Wisconsin is the only State that currently requires systems to notify
households with lead sampling results derived from their home. This
regulation is formalized in 809.541(12) Wis. Adm. Code. Texas currently
requires systems to notify households if the sample from their house is
above the action limit.  Prior to 1993, Florida required systems to
notify households if the sample from their home was above action limit.
This requirement was terminated after the State realized that there was
no federal action requiring such notification.

Many States, however, encourage systems to notify homeowners of sampling
results, as summarized in Table 2. 52.4 percent of all States that
responded encourage systems to notify households with lead sampling
results derived from any volunteer sampling program. 10 States, 23.8
percent of all States that responded, encourage systems to notify
households for specific situations. For example, 7 States only encourage
systems to notify households if lead levels are greater than the action
limit (as indicated by “If Sample is > AL” in Table E-2). 3 States
only encourage systems to notify households if an occupant specifically
requests the sampling and/or results (as indicated by “If Results are
Requested” in Table E-3). 

In addition, many States are aware of at least some systems in the State
that notify homeowners at the current time, as summarized in Table E-3.
29 States indicated whether households are notified of testing results,
while 11 States did not have any data or knowledge indicating whether
households were notified of testing results.

The State responses to the three questions were evaluated to determine
the overall notification status for the State in Table E-4. The
categories for notification are as follows:

Required

Large systems only

Encouraged by State

If greater than Action Level

Upon request by homeowner

If greater than Action Level and upon request

Sometimes

If greater than 100 ppb

None

Unknown

For each of these categories, we assigned a percent of systems in that
State that notify customers, also shown in Table E-4. 

Required: 100 percent

Large systems only: 100 percent of large systems

Encouraged by State: 16 percent. This value was derived from Rogers
Diffusion of Innovation Theory that postulates that for a new technology
or practice, 3.5% percent of affected parties will be “innovators”
and 12.5% will be “early adopters” who will adopt a practice or
technology without being required.  We assume that this same principle
applies to the adoption of an encouraged, but not required, practice for
drinking water systems, such as notification of customers. 

If greater than Action Level: 10 percent

Upon request by homeowner: 5 percent

If greater than Action Level and upon request: 15 percent

Sometimes: 5 percent

If greater than 100 ppb: 1 percent

None: 0 percent

Unknown: 0 percent

We calculate the number of systems per State by size category that are
already notifying customers by multiplying these assumed percentages by
the number of systems. We estimate the number of systems not notified,
who would therefore incur costs under the new rule provision, by
subtracting the number of systems that notify from the total number of
systems. Table E-5 displays the number of systems that notify and that
do not notify by system size.

 Notification Required by States

State	Is Direct Notification Required?	If Sometimes Required, When is
Notification Required?

State	Is Direct Notification Required?	If Sometimes Required, When is
Notification Required?

AK	No

	Navajo	No

	AL	No

	NC	No

	AR	No

	ND	No

	AZ	No

	NE	No

	CO	No

	NH	No

	CT	No

	NJ	No

	DE	No

	NV	No

	FL	No	* Prior to 2003, If sample was > AL

NY	No

	GA	No

	OH	No

	HI	No

	OK	No

	IA	No

	PA	No

	IN	No

	RI	No

	KS	No

	SC	No

	KY	No

	SD	No

	LA	No

	TN	No

	MA	No

	TX	Sometimes	If sample is > AL

MD	No

	UT	No

	ME	No

	VA	No

	MN	No

	VT	No

	MO	No

	WI	Yes

	MS	No

	WV	No

	MT	No

	WY	No

	

 Is Notification Encouraged?

State	Is Notification Encouraged?	If Sometimes Encouraged, When is
Notification Encouraged?

State	Is Notification Encouraged?	If Sometimes Encouraged, When is
Notification Encouraged?

AL	No

	Navajo	Sometimes	If Results are Requested

AR	Sometimes	If Sample is > AL

NC	Sometimes	If Sample is > AL

AZ	Sometimes	If Results are Requested

ND	Yes

	CO	No

	NE	Yes

	CT	No

	NH	Yes

	DE	Yes

	NJ	Yes

	FL	Yes

	NV	No

	GA	Yes

	NY	Yes

	HI	Sometimes	If Sample is > 100 ppb

OK	Yes

	IA	Yes

	OR	Yes

	IN	No

	RI	Yes

	KS	Yes

	SC	Yes

	KY	No

	SD	No

	LA	No

	TN	Yes

	MA	Yes

	TX	Sometimes	If Results are Requested

MD	Yes

	UT	Yes

	ME	Sometimes	If Sample is > AL

VA	Yes

	MI	Sometimes	If Sample is > AL

VT	Yes

	MN	No

	WA	Yes

	MO	Sometimes	If Sample is > AL

WV	No

	MS	Yes

	WY	Sometimes	If Sample is > AL

 Notification Received by Households At Current Time

State	Do Homeowners Receive Notification?	If Sometimes Received, When Is
Notification Received?	Does System Provide Indirect Notification?

AL	Unknown

ASPA	Sometimes	If Sample is > AL

	AR	No

CCR, If Requested

AZ	Sometimes	If Results are Requested

	DE	No

CCR

GA	Sometimes	Depends on System

	IA	Sometimes	Depends on System

	ID	Unknown

IL	Sometimes	Depends on System

	KS	Unknown

KY	No

LA	No

If Requested

MD	Unknown

ME	Sometimes	Large Systems

	MI	Sometimes	Depends on System

	MN	Sometimes	If Sample is > AL

	MO	Sometimes	Depends on System

	MS	Yes

MT	Unknown

Navajo	Sometimes	Depends on System	If > AL than CCR

NE	Unknown

NH	Yes

NJ	Sometimes	If Requested, If > AL

	NM	Unknown

NV	No

NY	Sometimes	If Requested, Depends on System

	OH	Unknown

OK	Yes

OR	Yes

PA	Unknown

RI	Sometimes	Large Systems

	SC	Sometimes	Depends on System

	SD	No

TN	Sometimes	Depends on System

	TX

	CCR

UT	Sometimes	Depends on System

	VA	Sometimes	If Sample is > AL

	WI	Yes

WV	Unknown

WY	No

 Summary of Notification by State and Assumed Percent of Systems
Notified

State	Summary of Notification	Percent of Systems Notified

AK	Upon Request	5%

AL	None	0%

ASPA	> AL	10%

AR	> AL, Upon Request	15%

AZ	Upon Request	5%

CA	Unknown	0%

CO	None	0%

CT	None	0%

DE	Encouraged	16%

FL	Encouraged	16%

GA	Encouraged	16%

HI	>100 ppb	1%

IA	Encouraged	16%

ID	Unknown	0%

IL	Sometimes	5%

IN	None	0%

KS	Encouraged	16%

KY	None	0%

LA	Upon Request	5%

MA	Encouraged	16%

MD	Encouraged	16%

ME	> AL, Large	10/100%

MI	>AL	10%

MN	>AL	10%

MO	>AL	10%

MS	Encouraged	16%

MT	Unknown	0%

Navajo	Upon Request	5%

NC	>AL	10%

ND	Encouraged	16%

NE	Encouraged	16%

NH	Encouraged	16%

NJ	>AL, Upon Request	15%

NM	Unknown	0%

NV	None	0%

NY	Upon Request	5%

OH	Unknown	0%

OK	Encouraged	16%

OR	Encouraged	16%

PA	Unknown	0%

RI	Large	0/100%

SC	Encouraged	16%

SD	None	0%

TN	Encouraged	16%

TX	>AL	10%

UT	Encouraged	16%

VA	Encouraged	16%

VT	Encouraged	16%

WA	Encouraged	16%

WI	Required	100%

WV	None	0%

WY	Greater than AL	10%

Summary of the Number of Systems that Notify Customers of Monitoring
Results and the Number of Systems that Do Not Notify

CWS	Total Number of Systems	Systems Notifying Customers of Monitoring
Results	Systems Not Notifying Customers of Monitoring Results	Percent of
Systems Not Notifying

<=100	13,766	1,472	12,294	89%

101-500	16,240	1,685	14,555	90%

501-1,000	5,914	656	5,258	89%

1,001-3,300	8,298	903	7,395	89%

3,301-10,000	4,707	480	4,227	90%

10,001-50,000	3,057	304	2,753	90%

50,001-100,000	484	50	434	90%

100,001-250,000	259	23	236	91%

250,001-500,000	63	7	56	89%

500,001-1,000,000	32	3	29	89%

>1,000,000	18	1	17	93%

TOTAL	52,838	5,583	47,255	 

NTNCWS	Total Number of Systems	Systems Notifying Customers of Monitoring
Results	Systems Not Notifying Customers of Monitoring Results	Percent of
Systems Not Notifying

<=100	9,548	1,206	8,342	87%

101-500	6,997	870	6,127	88%

501-1,000	1,925	204	1,721	89%

1,001-3,300	795	77	718	90%

3,301-10,000	96	7	89	93%

10,001-50,000	13	1	12	92%

50,001-100,000	1	0	1	100%

100,001-250,000	0	0	0	 

250,001-500,000	0	0	0	 

500,001-1,000,000	0	0	0	 

>1,000,000	0	0	0	 

TOTAL	19,375	2,365	17,010	 

Appendix E-2: Regulatory Change III.E System Public Education Costs
(4th Qtr 2006$)

System Size Category	Number of Systems [1]	Percentage of Systems that Do
Not Currently Notify Customers [2]	Subtotal Systems Affected by Reg
Change III.E [3]	# Systems Affected by Reg Change III.C that are
Affected by Reg. Change III.E [4]	Total Annual Monitoring Events [5]
Total Customer Notification Letters [6]	Annual System Burden (hrs) [7]
Annual System Labor Cost [8]	Annual System O&M Cost [9]	Total Annual
System Cost

CWSs:	 	 	 	 	 	 	 	 	 	 

<100	13,766	89%	12,252	158	6,237	31,186	6,237	$148,817	$13,410	$162,227

101-500	16,240	90%	14,616	131	7,326	51,089	7,326	$188,270	$21,968
$210,239

501-1K	5,914	89%	5,263	108	2,760	39,237	2,760	$76,015	$16,872	$92,887

1k-3.3K	8,298	89%	7,385	 	3,570	48,989	3,570	$98,305	$21,065	$119,370

3.3K-10K	4,707	90%	4,236	44	2,136	59,735	2,987	$101,423	$25,686	$127,109

10K-50K	3,057	90%	2,751	32	1,395	58,648	2,932	$101,431	$25,218	$126,649

50K-100K	484	90%	436	5	221	9,316	466	$16,113	$4,006	$20,119

100K-500K	322	91%	293	5	153	10,810	541	$21,205	$4,649	$25,853

500K-1M	32	89%	28	 	14	945	47	$1,853	$406	$2,259

>1 M	18	93%	17	 	8	555	28	$1,089	$239	$1,328

 	 	 	 	 	 	310,510	 	 	 	 

NTNCWSs:	 	 	 	 	 	 	 	 	 	 

<100	9,548	87%	8,307	189	4,393	-	4,393	$104,805	$0	$104,805

101-500	6,997	88%	6,157	126	3,228	-	3,228	$82,953	$0	$82,953

501-1K	1,925	89%	1,713	29	887	-	887	$24,423	$0	$24,423

1k-3.3K	795	90%	716	16	378	-	378	$10,416	$0	$10,416

3.3K-10K	96	93%	89	1	45	-	45	$1,529	$0	$1,529

10K-50K	13	92%	12	1	8	-	8	$264	$0	$264

50K-100K	1	100%	1	 	 	 	 	 	 	 

100K-500K	 	 	0	 	 	 	 	 	 	 

500K-1M	 	 	 	 	 	 	 	 	 	 

>1 M	 	 	 	 	 	 	 	 	 	 

Total	72,213	89%	64,273	846	32,757	 	35,831	$978,910	$133,519
$1,112,429

Notes:

1.  Number of CWS and NTNCWS systems per SDWIS/FED Data 2004. 

2.  Data source: USEPA Survey of States - Questions on State
Implementation of Lead and Copper Rule (July 2004).

3. The number of systems affected by Reg. Change III.E equals the total
number of CWS and NTNCWS systems (see Note 1) multiplied by the
percentage of systems that currently do not notify their customers (see
Note 2). For example, 89% of 13,766 CWSs serving <100 people do not
notify customers; therefore, these 12,252 (13,766 x 0.89) systems are
affected by Reg. Change III.E.

4.  Regulatory Change III.E will also affect systems that are affected
by regulatory change III.C that exceeded the lead action level while on
reduced monitoring and had to revert to standard monitoring, and do not
currently notify their customers of lead test results.  The number of
systems affected by regulatory change III.C is based on the number of
systems exceeding the lead action level as reported in the SDWIS Fed
data 2003.  The number of CWS and NTNCWS are listed separately in this
table because the NTNCWS have a different burden requirement.  NTNCWS
are not required to prepare notification letters for each sample but
provide general notification through bulletin board notices.  It is also
assumed that 91% of these systems are on reduced monitoring based on
USEPA Survey of States July 2004. 

5. For the subtotal of systems affected by Reg. Change III.E, it is
assumed that 9% of systems use a standard monitoring schedule with 6
monitoring events in 3 years or 2 monitoring events each year.  It is
also assumed that 91% of systems are on a reduced monitoring schedule
with 1 monitoring event in 3 years. In addition, systems affected by
Reg. Change III.C that are also affected by Reg. Change III.E use a
standard monitoring schedule with 2 monitoring events each year.(Source:
USEPA Survey of States - Questions on State Implementation of Lead and
Copper Rule. July 2004). For systems affected by Reg. Change III.C,
assume all systems have reverted to a standard monitoring schedule. 

6.  The number of customer notification letters on lead monitoring
results is based on the sampling schedule for standard and reduced
monitoring as summarized in Table 7.1.a.  It is assumed that one letter
is sent for each sampling site required by 40 CFR 141.86c.

7. For CWSs, assume burden of 1 hour per monitoring event for systems
serving <3,300 people.  For systems serving > 3,300 people, assume
burden of 1 hour per 20 letters  For NTNCWSs, assume 1 hour per
monitoring event for all system sizes.  Burden estimates based on
recommendations of Expert Review Panel (November 2005).

8. Wage rates from SAIC contract study, "Labor Costs for National
Drinking Water Rules (2003) updated to 4th Qtr 2006.

9. O&M costs estimated at $0.43 per letter including $.39 postage and
materials ($.01 paper and $.03 envelope).Appendix E-3: Regulatory
Change III.E System Reporting Costs (4th Qtr 2006$)

System Size Category	Number of Systems [1]	# Systems Affected by Reg
Change III.C	Total Annual Monitoring Events	Total Self Certification
Letters to State	Annual System Burden (hrs) [2]	Annual System Labor Cost
Annual System O&M cost [3]	Total Annual Costs

CWSs:	 	 	 	 	 	 	 	 

<100	13,766	366	7,386	7,386	886	$21,146	$3,176	$24,322

101-500	16,240	271	8,391	8,391	1,007	$25,879	$3,608	$29,487

501-1K	5,914	167	3,192	3,192	383	$10,550	$1,373	$11,923

1k-3.3K	8,298	 	4,011	4,011	481	$13,255	$1,725	$14,979

3.3K-10K	4,707	50	2,375	2,375	285	$9,678	$1,021	$10,700

10K-50K	3,057	37	1,552	1,552	186	$6,440	$667	$7,107

50K-100K	484	6	246	246	30	$1,021	$106	$1,127

100K-500K	322	6	168	168	20	$789	$72	$861

500K-1M	32	 	15	15	2	$73	$7	$79

>1 M	18	 	9	9	1	$41	$4	$45

 	 	 	 	 	 	 	 	 

NTNCWSs:	 	 	 	 	 	 	 	 

<100	9,548	217	5,049	5,049	606	$14,456	$2,171	$16,627

101-500	6,997	143	3,668	3,668	440	$11,312	$1,577	$12,889

501-1K	1,925	33	996	996	120	$3,293	$428	$3,721

1k-3.3K	795	18	420	420	50	$1,389	$181	$1,570

3.3K-10K	96	1	48	48	6	$197	$21	$218

10K-50K	13	1	8	8	1	$34	$4	$38

50K-100K	1	 	 	 	 	 	 	 

100K-500K	 	 	 	 	 	 	 	 

500K-1M	 	 	 	 	 	 	 	 

>1 M	 	 	 	 	 	 	 	 

Total	72,213	1,316	37,534	37,534	4,504	$119,553	$16,140	$135,693

1. Assumes all systems will prepare self-certification letter

2.  Assumes .12 hours to prepare self-certification letter to State
based on estimate to prepare self-certification for the CCR.

3.  Assumes $0.43 postage and materials cost ($0.39 postage, $0.01 paper
and $0.03 envelope).Appendix E-4: Regulatory Change III.E State
Reviewing Costs (4th Qtr 2006$)

System Size Category	Number of Systems [1]	# Systems Affected by Reg
Change III.C	Total Annual Monitoring Events	Total Self Certification
Letters to State	Total Annual Hours to Review (hrs) [2]	Total Annual
Labor Cost

CWSs:	 	 	 	 	 	 

<100	13,766	366	7,386	7,386	739	$32,143

101-500	16,240	271	8,391	8,391	839	$36,520

501-1K	5,914	167	3,192	3,192	319	$13,894

1k-3.3K	8,298	 	4,011	4,011	401	$17,455

3.3K-10K	4,707	50	2,375	2,375	238	$10,337

10K-50K	3,057	37	1,552	1,552	155	$6,753

50K-100K	484	6	246	246	25	$1,070

100K-500K	322	6	168	168	17	$730

500K-1M	32	 	15	15	2	$67

>1 M	18	 	9	9	1	$38

 	 	 	 	 	 	 

NTNCWSs:	 	 	 	 	 	 

<100	9,548	217	5,049	5,049	505	$21,973

101-500	6,997	143	3,668	3,668	367	$15,963

501-1K	1,925	33	996	996	100	$4,337

1k-3.3K	795	18	420	420	42	$1,829

3.3K-10K	96	1	48	48	5	$211

10K-50K	13	1	8	8	1	$36

50K-100K	1	0	0	0	0	$0

100K-500K	 	 	 	 	 	 

500K-1M	 	 	 	 	 	 

>1 M	 	 	 	 	 	 

Total	72,213	1	37,534	37,534	3,753	$163,355

1.  Assumes all systems file self-certification.

2.  Assumes .10 hours to review and files self-certification letter by
State based on estimate to review and file self-certification for the
CCR.Appendix F

Derivation of Direct Costs for Regulatory Change III.G

Appendix F-1: Derivation of estimates for lead service line replacement
sampling

	Under the existing rule, systems that are replacing lead service lines
in response to an Action Level exceedance may sample lead levels from
lead service lines to determine if physical replacement is required. If
the sampled lead levels from an individual service line is below the
Action Level (15 ppb), that line would not have to be physically
replaced, but could be considered “replaced” towards meeting the
annual goal of 7 percent replacement. The sampling of lead service lines
associated with lead service line replacement activities is similar to
LCR compliance sampling in that tap samples from residential homes are
used. The service line samples will either require access to the house
or a separate set of instructions for taking the sample if sampling is
performed by the customer. In addition, sampling needs to be carried out
in a way to ensure that levels of lead in the service line (as opposed
to household plumbing) is measured. Often, the change in water
temperature is used to determine if the water is from the service line. 
However, in many climates, the temperature change approach may not work,
so additional time will be needed to determine the volume of water to
flush to reach the service line (determining the diameter and length of
the service line and household plumbing to estimate the volume of water
to flush to reach the service line). Systems incur costs to collect and
analyze these samples.

Sample Collection

	

	In order to collect drinking water samples from customer sites to
conduct monitoring for lead service line replacement, systems undertake
the following activities:

Notification of customers at locations targeted for lead service line
replacement,

Distribution of sample materials and instructions,

Coordination with customers during sampling to remind them and answer
questions,

Collection of samples from customer locations, and

Review of samples and validation that appropriate collection procedures
have been followed.

The labor required by systems to sample lead service lines for lead
content has been estimated previously by EPA. The June 1999 Information
Collection Request states that “Each sample will require a collection
burden of 2 hours…”  The estimate of 2.0 hours per sample for lead
and copper tap sampling collection is also used in the 2004 ICR and, in
the absence of new information, has been applied in this analysis.  It
should be noted that this estimate is slightly less (2.0 hours instead
of 2.5 hours) than the estimate of similar sampling to assess compliance
with the LCR.  Compliance sampling entails a different set of up-front
activities, including identification and recruitment of participants. 
Lead service line replacement up-front activities are a bit different in
mainly notifying customers of sampling and possible lead service line
replacement.  It is expected that less time is needed to recruit
participants for lead service line sampling as compared to LCR
compliance monitoring because the participant may receive a direct
benefit (removal of lead service line if lead level is greater than 15
ppb).  These differences in up front activities offer a possible
explanation for the difference in collection burden between LCR
compliance monitoring and lead service line sampling.

Sample Analysis

	Previous documents estimated the cost to analyze a water sample for
lead content as being half the cost to analyze a sample for both lead
and copper content.  The method most commonly used at the current time
(ICP-MS (200.8) method) provides estimates for both lead and copper. 
Therefore, this analysis assumes that the cost to analyze a sample for
only lead is the same as the cost to analyze for both lead and copper.

The cost to analyze a compliance sample for lead is based on the fee
charged by certified commercial laboratories.  This fee includes both
the cost of labor and materials.  The June 1999 ICR assumed a commercial
fee of $30 to analyze a sample for lead and copper.  Updated to current
dollars (4th Qtr 2006), the fee is estimated at $36.34 per sample.  To
validate that the updated analysis fee is reasonable, publicly available
estimates of costs were collected as displayed in the following table.

Source	Fee for Lead and Copper Analysis of Drinking Water	Citation

US EPA	$20 - $100	http://www.epa.gov/safewater/lead/leadfacts.html

NY State DOH	$15 - $50
http://www.health.state.ny.us/nysdoh/lead/leadwtr.htm

CWLTI 

(non profit in NC)	$24 – lead only

$30 lead and copper	http://www.leadtesting.org/orderonline.htm

Hometips.com	$35 – lead only	http://www.hometips.com/help/wat5.html

Fairfax Water	$35 per faucet	http://www.fcwa.org/water/lead.htm

The updated estimate of $36.34 per sample for lead and copper is well
within the range provided by the USEPA and the NY State Department of
Health.  It is also very close to the $35 that one utility charges for
lead testing (Fairfax Water) and the estimate from a home advice website
from two national laboratories (National Testing Labs and Suburban Water
Testing).

	Based on OMB guidance in order to be consistent with estimates for
other drinking water rules, the June 1999 ICR assumes that all analysis
is conducted in-house for utilities, requiring that the commercial fee
be broken into its labor component and materials component.  The labor
required to analyze each sample is estimated at 1 hour, based on the use
of the ICP-MS (200.8) method.  The average labor rate for 1 hour of
labor is estimated in the following table.

Size Category	Labor for 1 Hr

<= 100	$23.86 

101 to 500	$25.70 

501 to 3,300	$27.54 

3.3K-10K	$28.20 

10K-100K	$28.99 

>100K	$34.79 

Mean	$28.18 

The materials cost associated with analyzing a compliance sample for
lead can then be estimated by subtracting the labor component of $28.18
from the total fee of $36.34 for an estimate of $8.16 materials cost per
sample.

Appendix F-2: Regulatory Change III.G System Tap Water Monitoring Costs
(4th Qtr 2006$)

# Systems Affected by Reg Change III.G [1]:	54

# Systems that re-exceed lead AL and continue LSL replacement [2]	1

Annual # LSL Samples per System [3]	1,431

Estimated # Samples in Sampling Pool [4]	21,465

Estimated # Samples that need to be Retested [5]	16,313

Total Labor Cost [6]	$1,507,994

Total O&M Cost [7]	$133,117

Annual Labor Cost [8]	$100,533

Annual O&M Cost [8]	$8,874

Total Annual Cost	$109,407

Notes:

1.  Systems that have been required to conduct a lead service line
replacement program may potentially be affected by Reg. Change III.G if
they discontinue the program, then later re-exceed the lead action
level. The number of systems was estimated based on survey responses
from the USEPA Survey of States Questions on State Implementation of
Lead and Copper Rule (July 2004).Six states indicated the specific
number of systems that have been required to initiate LSL replacement
programs (total of 28 systems).  Five other states indicated that they
had systems that were required to have LSL programs but did not indicate
the specific number of systems.  For these 5 States, it is assumed that
each State has 5 systems with LSL programs required by State, for a
total of 25 systems. One system is added for DCWASA. The total number of
systems affected by Reg. Change III.G is assumed to be 28+25+1= 54
systems.

2.  Assume 1.4% systems re-exceed lead action level and are required to
continue LSL replacement program (data source:   HYPERLINK
"http://www.epa.gov/safewater.lcrmr"  www.epa.gov/safewater.lcrmr )
Assumption is based on current exceedance rate for lead action level by
medium and large systems.

3.  If a system re-exceeds the lead action level, samples must be
collected from each lead service line previously deemed to be replaced
through testing. The number of LSLs per system that have previously been
replaced through testing is estimated based on a utility survey
completed by Black and Veatch in 

July 2005.  Twenty-six utilities reported that 558,135 LSLs in 1992 or
21,467 LSLs per system. Assuming each utility conducts LSL replacements
at a rate of 7% per year or over 15 years, this equals 21,467 divided by
15 or 1,431 LSLs per system per year 
(www.epa.gov/safewater/lcrmr/pdfs/summary_lcmr_review_lead_line_replacem
ent_workshop_10-26-04.pdf).

4.  Assume that a system conducts a LSL replacement program for 15 years
upon initial exceedance of the lead action level based on LCR
requirements. The number of samples in the sampling pool is equal to the
number of systems that re-exceed the lead AL, x (annual # samples per
system) x 15 years.

5.  Assume the utility replaces 24% of LSLs and tests-out the remaining
76% based on data from DCWASA (2003). The number of samples that needs
to be retested equals the number of samples in the sampling pool x 76%.

6.  Assume burden is 3 hours for sample collection and analysis as
described in Appendix F-1.  Use system labor rate of $30.81 per hour
(average of wage rates from SAIC contract study, "Labor Costs for
National Drinking Water Rules" (2003) updated to 4th Qtr 2006.

7.  Use average O&M cost per sample $8.16as described in Appendix F-1.

8.  Assume the systems conduct retesting over a 15 year period (based on
LCR requirements for LSL replacement programs).

Appendix F-3: States with at least 1 system required to initiate lead
service line replacement

State	At Least One System Required to Do LSLR	Number of Systems (If
Specified)	Number of Systems Assumed

AK

	AL

	AR

	AS

	AZ	Yes

5

CA

	CO

	CT	Consent Decree

DC

	1

DE

	FL	Withdrawn

GA

	GU

	HI

	IA	Yes	1	1

ID

	IL	Yes

5

IN

	KS

	KY

	LA

	MA	Yes

5

MD

	ME

	MI	Yes	14	14

MN	Yes	2	2

MO

	MS

	MT	Yes

5

Navajo

	NC

	ND

	NE

	NH

	NJ

	NM

	Nmar

	NV

	NY	Yes	1	1

OH

	OK

	OR

	PA	Yes	9	9

PR

	RI

	SC

	SD

	TN

	TX

	UT	Yes	1	1

VA

	VI

	VT

	WA

	WI	Yes

5

WV

	WY

	Total	11	28	54

	* Requirement withdrawn before LSLR started due to not longer exceed AL

	Notes:  

	(1) Average number of systems performing LSLR in States that specified:
28 systems in 6 States, average of 5 systems per State

(2) Assumed 5 systems for States that did not specify number (WI, MT,

MA, AZ, IL)

(3) Added DC WASA



Appendix G

Derivation of Direct Costs for Initial Rule Activities

Appendix G-1: System Rule Implementation Costs (4th Qtr 2006$)

System Classification	# Systems [1]	Burden Per System (Hrs.) [2]	Total
Burden (Hrs.)	Total Labor Cost [3]

CWS, 25-100	13,766	5	68,830	$1,642,284

CWS, 101-500	16,240	5	81,200	$2,086,840

CWS, 501-3,300 	14,212	5	71,060	$1,956,992

CWS, 3,300-10,000	4,707	8	37,656	$1,278,722

CWS, 10,001-100K	3,541	8	28,328	$979,866

CWS, >100K	372	40	14,880	$583,742

NTNCWSs, 25-100	9,548	5	47,740	$1,139,076

NTNCWSs, 101-500	6,997	5	34,985	$899,115

NTNCWSs, 501-3,300	2,720	5	13,600	$374,544

NTNCWSs, 3,300-10,000	96	8	768	$26,080

NTNCWSs, 10,001-100,000	14	8	112	$3,874

NTNCWSs, >100,000	0	40	0	$0

Total	72,213	 	399,159	$10,971,135

Notes:

1.  Number of systems per SDWIS/FED Data 2004.

2.  Burden estimate based on consensus agreement of expert panels on
11.21.05, adjusted to reflect comments received.

3.  Wage rates from SAIC contract study, "Labor Costs for National
Drinking Water Rules" (2003) updated to 4th Qtr 2006 dollars.

Appendix G-2: State/Primacy Agencies Rule Implementation Costs (4th Qtr
2006$)

# States/Primacy Agencies [1]	Burden Estimate per State (Hours) [2]
Total Burden (Hrs.)	Labor Rate ($/hr) [3]	Total Labor Cost

57	600	34,200	$43.52	$1,488,433

Notes:

1. The LCR Regulatory Changes apply to 50 states, 6 territories and 1
Indian Tribe, for a total of 57 entities.

2. Burden includes regulation adoption, program development and
miscellaneous training. (Approximately .3 FTE or 4 months of FTE)

3. Use state labor rate of $43.52/hour (Source: Information Collection
Request for Contaminant Occurrence Data in Support of EPA's Second  Six
Year Review of National Primary Drinking Water Regulations (August
2006)).





Appendix H

Derivation of Direct Costs for Regulatory Change III.F

Appendix H-1. Summary of Cost Estimates for New Public Education
Requirements for LCR Short Term Revisions (4th Qtr 2006$)

Activity	Table	Requirement	Affected Party	Annual Labor Cost	Annual
Material Cost	Total Cost

III.F(a) Changes to Mandatory Text

III.F(a)	Appendix H-2	Customer Notification	Systems that Exceed LAL
$91,400	$0	$91,400

III.F(b). Activities to Better Reach At-Risk Populations

III.F(b)(1)	Appendix H-3	Notify 3 Organizations	CWS that Exceed LAL
$21,900	$21,400	$43,300

III.F(b)(2) (i-viii)	Appendix H-6 	Additional Activities 	CWS that
Exceed LAL	$292,700	$0	$292,700

III.F(c) Communication Activities with Consumers throughout a Lead
Exceedance

III.F(c)(1)	Appendix H-21	Customer Bills	CWS that Exceed LAL	$47,400	$0
$47,400

III.F(c)(2)	Appendix H-22	Post on Website	Large CWS that Exceed LAL	$100
$0	$100

III.F(c)(3)	Appendix H-23	Press Releases	CWS that Exceed LAL	-$3,700
-$500	-$4,200

III.F(e) Change in Requirements for CCR Statements

III.F(e)	Appendix H-24	CCR Statement	CWS that Don’t Exceed LAL
$354,600	$0	$354,600

III.F(g) System Cost for Reporting and Consultation with State

III.F(g)	Appendix H-7	Consultation with State & Letter	CWS that Exceed
LAL	$33,500	$200	$33,700

III.F(f) Cost to State Primacy Agency

III.F(f)	Appendix H-25	Review	State Primacy Agency	$63,000	$0	$63,000

Total for All Affected Parties	$901,300	$21,200	$922,500

Subtotal Water Systems	$837,900	$21,200	$859,200

 Appendix H-2. III.F(a) Customer Notification - Additional Burden and
Costs for Systems that Exceed the Lead Action Level (4th Qtr 2006$)

System Size Category	# Systems that Exceed Lead AL [1,2]	Annual System
Burden (hrs) [3]	Annual System Labor Cost [4]	Annual System O&M Cost [5]
Total Annual System Costs

CWS	 	 	 	 	 

25-100	185	648	$15,449	$0	$15,449

101-500	155	543	$13,942	$0	$13,942

501-3,300	133	466	$12,820	$0	$12,820

3.3K-10K	54	189	$6,418	$0	$6,418

10K-50K	40	140	$4,843	$0	$4,843

50K-100K	7	25	$847	$0	$847

>100K	7	25	$961	$0	$961

 	 	 	 	 	$0

NTNCWS	 	 	 	 	$0

25-100	217	760	$18,122	$0	$18,122

101-500	143	501	$12,863	$0	$12,863

501-3,300	51	179	$4,916	$0	$4,916

3.3K-10K	1	4	$119	$0	$119

10K-50K	1	4	$121	$0	$121

50K-100K	 	 	 	 	 

>100K	 	 	 	 	 

Total	994	3,479	$91,421	$0	$91,421

Notes:

1.  Additional customer notification requirements affect only systems
that exceed the lead action level.  For systems serving <3,300 people,
the # systems is based on SDWIS/Fed data for the monitoring period
ending after January 2003.(Data source: USEPA Survey of States -
Questions on State Implementation of Lead and Copper Rule. July 2004). 

2.  For systems serving >3,300 people, the # systems is based on systems
that have exceeded the lead action level since 2003. data source:
www.epa.gov/safewater/lcrmr/lead-data.html, 8/30/05. 

3. Assume burden to prepare additional language for customer brochure is
3.5 hours for all systems based on Public Notification Rule. Tier 2
violation. 

4.  Loaded wage rates from SAIC contract study, "Labor Costs for
National Drinking Water Rules (2003) updated to 4th QTR 2006.

5.  Mailing and productions costs are covered in the existing
regulation.Appendix H-3. III.F(b)(1) Notify Organizations: Costs to
Deliver Brochures to Preschools, Licensed Daycares and OBGYNs for CWSs
that Exceed the Lead Action Level (4th Qtr 2006$)

System Size Category	# Systems that Exceed Lead AL [1,2]	Annual System
Burden for Contacting Organizations (hrs) [3]	Annual System Labor Cost
[4]	Annual System O&M Cost	Total Annual System Costs

CWS	 	 	 	 	 

25-100	185	185	$4,414	$85	$4,500

101-500	155	155	$3,984	$303	$4,287

501-3,300	133	133	$3,663	$754	$4,417

3.3K-10K	54	135	$4,585	$2,630	$7,215

10K-50K	40	100	$3,462	$7,317	$10,779

50K-100K	7	18	$614	$3,981	$4,595

100-500K	4	11	$420	$6,367	$6,787

500K-1M	1	5	$201	$5,887	$6,088

>1 M	2	15	$569	$33,732	$34,301

Total	581	756	$21,911	$21,436	$43,347

Notes

1.  Additional requirements affect only systems that exceed the lead
action level.  For systems serving <3,300 people, the # systems is based
on SDWIS/Fed data for the monitoring period ending after January
2003.(Data source: USEPA Survey of States - Questions on State
Implementation of Lead and Copper Rule. July 2004). 

2.  For systems serving >3,300 people, the # systems is based on systems
that have exceeded the lead action level since 2003. data source:
www.epa.gov/safewater/lcrmr/lead-data.html, 8/30/05. 

3. All CWSs that exceed the lead action level need to send a brochure
with a cover letter to daycare centers and preschools, obstetrician and
gynecologists, and one public health agency.  Table 4.a summarizes new
notifications requirements by system size.  For systems serving <3,300,
the only new burden is 1 hour per system to develop a cover letter and
assumes that systems will use a template provided by USEPA.  For systems
serving 3,300 to 100,000 people, assume new annual burden requirements
of 1 hours per system to update list of organizations; 1 hour per system
to develop a cover letter; 0.25 hour per 100 additional brochures for
production; and 0.5 hours per system to contact   the public health
agency. For systems serving >100,000 people, assume an annual burden of
2 hours per system to update list of organizations;1 hour per system to
develop a cover letter; 1 hour per 20 additional brochures for
production; and 0.5 hours per system to contact the public health
agency. 

4.  Loaded wage rates from SAIC contract study, "Labor Costs for
National Drinking Water Rules (2003) updated to 4th Qtr 2006. 

5.  For systems serving <3,300 people, new O&M burden is equal to the
material cost for a cover letter for each current notification per
system ($0.01  per notification). For systems serving >3,300 people, new
O&M burden equals $0.44 per brochure ($0.39 postage, $0.02 for 2 sheets
paper and $0.03  envelope) multiplied by the number of additional
notifications (Table 4.a) multiplied by the number of systems that
exceed the lead action level, plus  $0.01 for a cover letter for each
current notification per system.

Appendix H-4. Detail on Notifying Organizations

System Size Category	Average Population Served per System1	Additional
Notifications Per System2	Current # of Notifications Per System

<100	46	0	5

101-500	196	0	5

501-1K	567	1	5

1k-3.3K	1,465	3	5

3.3K-10K	4,474	9	5

10K-50K	16,840	33	46

50K-100K	52,423	101	90

100-500K	146,713	283	239

500K-1M	542,647	1,047	872

>1 M	1,554,621	3,000	2535

Notes

1. Data source: USEPA, Community Water System Survey 2000, EPA
815-R-02-005b, December 2002, Table 40. See Appendix H-5 for details. 

2. Assume total of 193 new organizations per 100,000 population
including 178 licensed day care facilities/preschools per 100,000
population (per National Child Care Association); and 15 ob/gyns per
100,000 population (per 2006 Statistical Abstract).



Appendix H-5. Average Population Served per System Size

System Size	Number of CWSs	Total Population in System Size	Average
Population Per System1

<100	13,766	827,126	46

101-500	16,240	4,130,005	196

501-1K	5,914	4,354,314	567

1k-3.3K	8,298	15,783,290	1,465

3.3K-10K	4,707	27,346,264	4,474

10K-50K	3,057	66,857,216	16,840

50K-100K	484	32,951,452	52,423

100-500K	322	61,352,680	146,713

500K-1M	32	22,551,546	542,647

>1 M	18	36,341,784	1,554,621

Total	52,788	213,602,347	4,046

Notes:

Data source: USEPA, Community Water System Survey 2000, EPA
815-R-02-005b, December 2002, Table 40.

1. Average population per system is equal to the total population in the
specified system size class divided by the number of CWSs in the
specified size class. The average population per system was reduced by
23% to account for multiple family housing that was formerly included in
the population data per consensus of EPA phone meeting 3.2.06.

Appendix H-6. III.F(b)(2)(i-viii) Additional Activities for CWSs that
Exceed the Lead Action Level  (4th Qtr 2006$)

System Size Category	# Systems that Exceed Lead AL [1,2]	Average Annual
Costs Per System for All Activities [3]	Number of Activities [4]	Total
Annual System Cost

CWS	 	 	 	 

25-100	185	$44	1	$8,142

101-500	155	$49	1	$7,541

501-3,300	133	$89	1	$11,772

3.3K-10K	54	$289	3	$46,886

10K-50K	40	$928	3	$111,380

50K-100K	7	$1,865	3	$39,162

>100K	7	$3,231	3	$67,856

Total	581	 	 	$292,739

Notes

1.  These additional requirements affect only CWSs that exceed the lead
action level.  For systems serving <3,300 people, the # systems is based
on SDWIS/Fed data for the monitoring period ending after January
2003.(Data source: USEPA Survey of States - Questions on State
Implementation of Lead and Copper Rule. July 2004). 

2.  For systems serving >3,300 people, the # systems is based on systems
that have exceeded the lead action level since 2003. data source:
www.epa.gov/safewater/lcrmr/lead-data.html, 8/30/05. 

3.  See detail on separate worksheet entitled "Add'l. Activities",
Column L rows 8-14

4. For new regulatory provision 7A-H, systems serving <3,300 people must
complete 1 activity while systems serving >3,300 people must complete 3
activities each year. Appendix H-7. III.F(g) Consultation with State
and Self-Certification Letter for CWSs that Exceed the Lead Action Level
 (4th Qtr 2006$)

System Size Category	# Systems that Exceed Lead AL [1,2]	Annual System
Burden for Consultation with State [3]	Annual System Labor Cost for
Consultation with State	Annual System Burden for Preparing
Self-Certification Letter [4]	Annual System Labor Cost for
Self-Certification Letter	Annual O&M for Self Certification Letter	Total
Annual System Costs

CWS	 	 	 	 	 	 	 

25-100	185	370	$8,828	22.2	$530	$80	$9,437

101-500	155	310	$7,967	18.6	$478	$67	$8,512

501-3,300	133	266	$7,326	15.96	$440	$57	$7,822

3.3K-10K	54	108	$3,667	6.48	$220	$23	$3,911

10K-50K	40	80	$2,767	4.8	$166	$17	$2,950

50K-100K	7	14	$484	0.84	$29	$3	$516

>100K	7	14	$549	0.84	$33	$3	$585

Total	581	1162	$31,589	69.72	$1,895	$250	$33,734

Notes:

1.  These additional requirements affect only CWSs that exceed the lead
action level.  For systems serving <3,300 people, the # systems is based
on SDWIS/Fed data for the monitoring period ending after January
2003.(Data source: USEPA Survey of States - Questions on State
Implementation of Lead and Copper Rule. July 2004). 

2.  For systems serving >3,300 people, the # systems is based on systems
that have exceeded the lead action level since 2003. data source:
www.epa.gov/safewater/lcrmr/lead-data.html, 8/30/05. 

3. Systems activities include consultation with state on additional
activities, content of cover, discussion of alternative mechanisms, and
discussion of extending deadlines at a burden of 2 hours per system. 

4.  Systems will also prepare a letter self-certifying that PE
activities have taken place and that materials have been distributed, at
a burden of .12 per letter per year, with $0.43 O&M costs ($0.39
postage, $0.01 paper, $0.03 for envelope).Appendix H-8. Cost of Each
Additional Activity for F(b)(2)(i-viii) (4th Qtr 2006$)

System Size Category	A. Public Service Announcements	B. Paid
Advertisements	C. Display in Public Areas	D. Internet Notification	E.
Public Meetings	F. Delivery to Every Household	G. Targeted Contact	H.
Materials Directly to Multi-Family & Ints	Average Annual Cost Per System
for All Activities

CWS	 	 	 	 	 	 	 	 	 

25-100	$98	$105	$24 	$24 	$48 	$7 	$34	$12	$44

101-500	$101	$105	$26 	$26 	$51 	$30 	$35	$15	$49

501-3,300	$105	$180	$111 	$28 	$55 	$166 	$37	$27	$89

3.3K-10K	$118	$180	$137 	$420 	$900 	$435 	$44	$81	$289

10K-50K	$1,400	$850	$696 	$596 	$2,400 	$1,114 	$66	$303	$928

50K-100K	$1,400	$5,000	$1,392 	$596 	$3,000 	$2,448 	$138	$945	$1,865

>100K	$1,400	$5,000	$3,943 	$1,035 	$5,000 	$3,874 	$563	$5,035	$3,231

Notes

A. See Appendix H-9 for details.

B. See Appendix H-10 for details.

C. See Appendix H-11 for details.

D. See Appendix H-12 for details.

E. See Appendix H-13 for details.

F. See Appendix H-18 for details.

G. See Appendix H-19 for details.

H. See Appendix H-20 for details.

Appendix H-9. Cost for Activity F(b)(2)(i) Public Service Announcements
(4th Qtr 2006$)

System Size Category	Price Per PSA Radio1	Price Per PSA TV2	Total PSA
Radio	Total PSA TV	Total Cost Per System

CWS	 	 	 	 	 

25-100	$98	$840	1	0	$98

101-500	$101	$840	1	0	$101

501-3,300	$105	$840	1	0	$105

3.3K-10K	$118	$840	1	0	$118

10K-50K	$560	$840	1	1	$1,400

50K-100K	$560	$840	1	1	$1,400

>100K	$560	$840	1	1	$1,400

Notes:

1. For systems serving <10,000 people, assume they use free-lance talent
for voice-over of an announcement developed by the system.  Assume 2
hours of system labor to write the announcement, $50 to produce spot
using freelance voice talent. 

For systems serving >10,000 people, assume $560 for production of a
radio PSA including $280 to produce the audio using union talent, $80
for 1 hour of studio time, and $200 for developing the script.

2.  Assume $840 for production of a TV PSA including $560 to produce the
audio using union talent, $80 for 1 hour of studio time, and $200 for
developing the script.Appendix H-10. Cost for Activity F(b)(2)(ii) Paid
Advertisements (4th Qtr 2006$)

System Size Category	Cost Per 10 Inch Newspaper Advertisement [1]	Number
of Times Published	Total Per System

CWS

	25-100	$105	1	$105

101-500	$105	1	$105

501-3,300	$180	1	$180

3.3K-10K	$180	1	$180

10K-50K	$850	1	$850

50K-100K	$5,000	1	$5,000

>100K	$5,000	1	$5,000

Notes

1.  Assume 10 column inches (1/8 page) per advertisement.  Rates range
from $105 per 10 column inch for local weekly newspapers to $5,000 for
the Washington Post based on a random search of six newspapers.



Appendix H-11. Cost for Activity F(b)(2)(iii) Display in Public Area 
(4th Qtr 2006$)

System Size Category	Number of Posting [1]	Hours to Post [2]	Materials
Cost [3]	Total Cost Per System

CWS	 	 	 	 

25-100	5	1	$0.20 	$24 

101-500	5	1	$0.20 	$26 

501-3,300	20	4	$0.80 	$111 

3.3K-10K	20	4	$0.80 	$137 

10K-50K	100	20	$4.00 	$696 

50K-100K	200	40	$8.00 	$1,392 

>100K	500	100	$20.00 	$3,943 

Notes:

1.  It is assumed that small and medium systems may post a notice at the
local grocery store, Laundromat or similar establishment.  Assume that
systems serving <500 people would need 5 such postings, and systems
serving between 501 and 10,000 people may need 20 postings.  It is
assumed that the posting is free but each system spends 1 to 2 hours in
travel time. 

2.  Burden hours based on estimated travel time between postings. 

3.  Assume material cost equals $0.04 per posting.

4.  Loaded wage rates from SAIC contract study, "Labor Costs for
National Drinking Water Rules (2003) updated to 4th QTR 2006.

Appendix H-12. Cost for Activity F(b)(2)(iv) Internet Notification 
(4th Qtr 2006$)

System Size Category	Hours to Compose Email & Check Email List	Materials
Cost	Total Cost Per System

CWS	 	 	 

25-100	1	$0.00 	$24 

101-500	1	$0.00 	$26 

501-3,300	1	$0.00 	$28 

3.3K-10K	5	$250.00 	$420 

10K-50K	10	$250.00 	$596 

50K-100K	10	$250.00 	$596 

>100K	20	$250.00 	$1,035 

Notes

1. It is assumed that small systems may prefer to notify customers via
e-mail, and would have a pre-existing list of customer e-mail addresses.

Assume that it would take systems 1 hour to compose and send out the
e-mail.

2.  Large systems would purchase email list and verify it.

Appendix H-13. Cost for Activity F(b)(2)(v) Public Meetings (4th Qtr
2006$)

System Size Category	Total Cost Per System

CWS	 

25-100	$48 

101-500	$51 

501-3,300	$55 

3.3K-10K	$900 

10K-50K	$2,400

50K-100K	$3,000

>100K	$5,000

Notes

1.  For systems serving <3,300 people, assume that system
representatives would bring up the issue for discussion at an existing
town meeting.  Assume 2 hours for preparation and meeting time. 

2.  See detailed cost estimates on separate worksheet for systems
serving >3,300 people based on cost of USEPA public stakeholder meetings
not including cost of meeting space.

Appendix H-14. Cost for Activity F(b)(2)(v) Public Meetings for Systems
Serving 3,301-10,000 People (4th Qtr 2006$)

	Management	Technical	Total

	Rate:	$ 56.99	Rate:	$ 28.20

	Activity	Hours	Cost	Hours	Cost	$

	Pre-meeting logistical arrangements1	0	$ 0	6	 $     169.20 	 $      
169.20 

Preparation of presentation/talking points2	2	 $   113.98 	12	 $    
338.40 	 $       452.38 

Attend meeting3	3	 $   170.97 	3	 $       84.60 	 $       255.57 

Post meeting, including notes4	0	$ 0	0	 $            -   	 $            
-   

Total	5	 $   284.95 	21	 $     592.20 	 $       877.15 

	 

	Estimated Total 5	$ 900

Hours	26

Notes

1. Select date, research and select site, negotiate with site for use,
publicize meeting, set up room including electronics (microphones, sound
system, presentation).

2. Prepare 30 minute presentation including consultation with health
experts and technical personnel as necessary, 30-50 slides, feedback
from management, practice presentation

3. Based on WASA, 1.5 hour open house, one hour presentation/Q&A, 15
minutes before and after, for a total of three hours, one senior
management, one technical staff

4. Prepare and review meeting transcript or notes, follow up with
attendees as appropriate

5. The estimated cost, $877.15, is rounded to the nearest hundred,
$900.00.

Appendix H-15. Cost for Activity F(b)(2)(v) Public Meetings for Systems
Serving 10,001-50,000 People (4th Qtr 2006$)

	Management	Technical	Total 

	Rate:	$56.99	Rate:	$ 28.99

	Activity	Hours	Cost	Hours	Cost	$

	Pre-meeting logistical arrangements1	0	$ 0	10	 $     289.90 	 $      
289.90 

Preparation of presentation/talking points2	8	 $   455.92 	30	 $    
869.70 	 $    1,325.62 

Attend meeting3	6	 $   341.94 	6	 $     173.94 	 $       515.88 

Post meeting, including notes4	0	$ 0	8	 $     231.92 	 $       231.92 

Total	14	 $   797.86 	54	 $  1,565.46 	 $    2,363.32 

Estimated Total 5	$ 2,400

Hours	68

Notes

1. Select date, research and select site, negotiate with site for use,
publicize meeting, set up room including electronics (microphones, sound
system, presentation).

2. Prepare 30 minute presentation including consultation with health
experts and technical personnel as necessary, 30-50 slides, feedback
from management, practice presentation

3. Based on WASA, 1.5 hour open house, one hour presentation/Q&A, 15
minutes before and after, for a total of three hours, one senior
management, one technical staff

4. Prepare and review meeting transcript or notes, follow up with
attendees as appropriate

5. The estimated cost, $ 2,363,32 is rounded to the nearest hundred,
$2,400.

Appendix H-16. Cost for Activity F(b)(2)(v) Public Meetings for Systems
Serving 50,001-100,000 People (4th Qtr 2006$)

	Management	Technical	Total 

	Rate:	$56.99	Rate:	$ 28.99

	Activity	Hours	Cost	Hours	Cost	$

	Pre-meeting logistical arrangements1	0	$ 0	20	 $     579.80 	 $      
579.80 

Preparation of presentation/talking points2	10	 $   569.90 	40	 $ 
1,159.60 	 $    1,729.50 

Attend meeting3	6	 $   341.94 	6	 $     173.94 	 $       515.88 

Post meeting, including notes4	0	$ 0	6	 $     173.94 	 $       173.94 

Total	16	 $   911.84 	72	 $  2,087.28 	 $    2,999.12 

Estimated Total 5	$ 3,000

Hours	88

Notes

1. Select date, research and select site, negotiate with site for use,
publicize meeting, set up room including electronics (microphones, sound
system, presentation).

2. Prepare 30 minute presentation including consultation with health
experts and technical personnel as necessary, 30-50 slides, feedback
from management, practice presentation

3. Based on WASA, 1.5 hour open house, one hour presentation/Q&A, 15
minutes before and after, for a total of three hours, one senior
management, one technical staff

4. Prepare and review meeting transcript or notes, follow up with
attendees as appropriate

5. The estimated cost, $ 2,999.12, is rounded to the nearest hundred,
$3,000.

Appendix H-17. Cost for Activity F(b)(2)(v) Public Meetings for Systems
Serving >100,000 People (4th Qtr 2006$)

	Management	Technical	Total 

	Rate:	$56.99	Rate:	$ 34.79

	Activity	Hours	Cost	Hours	Cost	$

	Pre-meeting logistical arrangements1	0	$ 0	20	 $     695.80 	 $      
695.80 

Preparation of presentation/talking points2	10	 $   569.90 	40	 $ 
1,391.60 	 $    1,961.50 

Attend meeting3	12	 $   683.88 	18	 $     626.22 	 $    1,310.10 

Post meeting, including notes4	0

28	 $     974.12 	 $       974.12 

Total	22	 $ 1,253.78 	106	 $  3,687.74 	 $    4,941.52 

Estimated Total 5	$ 5,000

Hours	128

Notes

1. Select date, research and select site, negotiate with site for use,
publicize meeting, set up room including electronics (microphones, sound
system, and presentation).

2. Prepare 30 minute presentation including consultation with health
experts and technical personnel as necessary, 30-50 slides, feedback
from management, practice presentation

3. Based on WASA, 1.5 hour open house, one hour presentation/Q&A, 15
minutes before and after, for a total of three hours, one senior
management, one technical staff

4. Prepare and review meeting transcript or notes, follow up with
attendees as appropriate

5. The estimated cost, $ 4,941.52, is rounded to the nearest thousand,
$5,000.00.

Appendix H-18. Cost for Activity F(b)(2)(vi) Delivery to Every
Household (4th Qtr 2006$)

System Size Category	Average Population Per System1	Persons Per
Household2	Delivery Cost Per Household3	Total Per System

CWS

25-100	46	2.57	$0.39 	$7 

101-500	196	2.57	$0.39 	$30 

501-3,300	1,091	2.57	$0.39 	$166 

3.3K-10K	4,474	2.57	$0.25 	$435 

10K-50K	16,840	2.57	$0.17 	$1,114 

50K-100K	52,423	2.57	$0.12 	$2,448 

>100K	248,896	2.57	$0.04 	$3,874 

Notes

1. Data source: USEPA, Community Water System Survey 2000, EPA
815-R-02-005b, December 2002, Table 40. See Appendix H-5 for details.

2. Data source: US Census, Current Population Reports, America’s
Families and Living Arrangements: 2003, Table 1. 

3. Assume delivery to every postal address either through mail or
distribution of flyers. Mailing costs would be $0.39 each. Assume
systems serving <3,300 people send notice through mail ($0.39 each).
Assume systems serving >3,300 people distribute flyers at a cost of
$0.25 per piece for systems serving 3,301 to 10,000 people; $0.17 per
piece for systems serving 10K to 50K; a $0.12 per piece for systems
serving 50K to 100K, and $0.04 for >100K (materials cost only, assumes
inclusion with existing mailing).

Appendix H-19. Cost for Activity F(b)(2)(vii) Targeted Contact  (4th
Qtr 2006$)

System Size Category	Average Population Per System 1	Upfront Cost For
List2	Pro-rated Upfront Cost	Number of Targeted Contacts3	Labor for
Production	Labor Costs for Production	Material Cost4	Total Cost

CWS

25-100	46	$250	$28	1	0.25	$6 	$0.44 	$34.18 

101-500	196	$250	$28	1	0.25	$6 	$0.44 	$34.64 

501-3,300	1,091	$250	$28	4	0.25	$7 	$1.92 	$36.58 

3.3K-10K	4,474	$250	$28	18	0.25	$8 	$7.87 	$44.14 

10K-50K	16,840	$250	$28	67	0.25	$9 	$29.64 	$66.06 

50K-100K	52,423	$250	$28	210	0.52	$18 	$92.26 	$138.18 

>100K	248,896	$250	$28	996	2.49	$98 	$438.06 	$563.48 

Notes

1. Data source: USEPA, Community Water System Survey 2000, EPA
815-R-02-005b, December 2002, Table 40. See Appendix H-5 for details.

2. Assume $250 for purchase of targeted list.  

3. Assume 1 targeted communication for every 250 population served
(based on Portland, OR targeted contact experience of approximately 2000
homes for a population served of 482,500). 

4. Use $0.44 for unit materials and printing cost for letter, envelope
and postage.

Appendix H-20. Cost for Activity F(b)(2)(viii) Provide Materials
Directly to Multi-Family Homes and Institutions (4th Qtr 2006$)

System Size Category	Average Population Per System1	Multi-Family Per
100,0002	Number of Multi-Family Per System	Time to Identify Multi-Family
(Hrs)3	Upfront Labor Cost4	Pro-rated Upfront Labor Cost	Labor Burden for
Production	Labor Cost for Production	Material Cost5	Total Cost

CWS

25-100	46	4,035	2	0.17 	$4 	$0.44 	0.5	$12 	$0.08	$12

101-500	196	4,035	8	0.67 	$17 	$1.90 	0.5	$13 	$0.32	$15

501-3,300	1,091	4,035	44	3.67 	$101 	$11.22 	0.5	$14 	$1.76	$27

3.3K-10K	4,474	4,035	181	15.08 	$512 	$56.91 	0.5	$17 	$7.24	$81

10K-50K	16,840	4,035	679	56.58 	$1,957 	$217.47 	1.6975	$59 	$27.16	$303

50K-100K	52,423	4,035	2115	176.25 	$6,096 	$677.39 	5.2875	$183 	$84.60
$945

>100K	248,896	4,035	10043	836.92 	$32,832 	$3,648.03 	25.1075	$985 
$401.72	$5,035

Notes:

1. Data source: USEPA, Community Water System Survey 2000, EPA
815-R-02-005b, December 2002, Table 40. See Appendix H-5 for details.

2. Data source: U.S. Census Housing Survey for buildings with more than
10 units each.

3. Assume five minutes per establishment to identify multi-family homes
and institutions.

4. Loaded wage rates from SAIC contract study, "Labor Costs for National
Drinking Water Rules (2003) updated to 4th Qtr 2006. Annual labor cost
equals hourly labor rate multiplied by annual burden.

5.  Assume a materials cost of $0.04 per notice.

Appendix H-21. III.F(c)(1) Customer Bills: Cost to Add Note to Customer
Bills for CWSs that Exceed the Lead Action Level (4th Qtr 2006$)

System Size Category	# Systems that Exceed Lead AL [1,2]	Annual System
Burden for Adding Notes to Customer Bills(hrs) [3]	Annual System Labor
Cost [4]	Annual System O&M Cost	Total Annual System Cost

CWS	 	 	 	 	 

25-100	185	555	$13,242	$0	$13,242

101-500	155	465	$11,951	$0	$11,951

501-3,300	133	399	$10,988	$0	$10,988

3.3K-10K	54	162	$5,501	$0	$5,501

10K-50K	40	120	$4,151	$0	$4,151

50K-100K	7	21	$726	$0	$726

>100K	7	21	$824	$0	$824

Total	581	1,743	$47,383	$0	$47,383

Notes:

1.  Additional customer notification requirements affect only CWSs that
exceed the lead action level.  For systems serving <3,300 people, the #
systems is based on SDWIS/Fed data for the monitoring period ending
after January 2003.(Data source: USEPA Survey of States - Questions on
State Implementation of Lead and Copper Rule. July 2004). 

2.  For systems serving >3,300 people, the # systems is based on systems
that have exceeded the lead action level since 2003. data source:
www.epa.gov/safewater/lcrmr/lead-data.html, 8/30/05. 

3. All CWS that exceed the lead action level need to include a note on
customer bills.  Assume all systems use quarterly billing. Current
requirements call for adding a note to one bill each year, so new burden
is adding a note to 3 bills each year per system.   Assume 1 hour per
billing period per system per year, which equals 3 hours per system per
year. No additional O&M costs.

4.  Loaded wage rates from SAIC contract study, "Labor Costs for
National Drinking Water Rules (2003) updated to 4th Qtr 2006. Appendix
H-22. III.F(c)(2) Post on Website: Cost for Posting Notice on Website
for CWSs that Exceed the Lead Action Level and Serve >100,000 People
(4th Qtr 2006$)

System Size Category	# Systems that Exceed Lead AL [1,2]	Annual System
Burden for Posting on Website (hrs) [3]	Annual System Labor Cost [4]
Annual System O&M Cost	Total Annual System Costs

CWS	 	 	 	 	 

25-100	185	0	$0	$0	$0

101-500	155	0	$0	$0	$0

501-3,300	133	0	$0	$0	$0

3.3K-10K	54	0	$0	$0	$0

10K-50K	40	0	$0	$0	$0

50K-100K	7	0	$0	$0	$0

>100K	7	3.5	$137	$0	$137

Total	581	3.5	$137	$0	$137

Notes:

1.  Additional requirements affect only systems that exceed the lead
action level.  For systems serving <3,300 people, the # systems is based
on SDWIS/Fed data for the monitoring period ending after January 2003.
(Data source: USEPA Survey of States - Questions on State Implementation
of Lead and Copper Rule. July 2004). 

2.  For systems serving >3,300 people, the # systems is based on systems
that have exceeded the lead action level since 2003. data source:
www.epa.gov/safewater/lcrmr/lead-data.html, 8/30/05. 

3. CWSs that serve more than 100,000 people that exceed the lead action
level must post a notice on their website.  Assume burden of 0.5 hours 
per system (source: ICR (PWSS ICR, 2040-0090, page B-6). No O&M costs.

4.  Loaded wage rates from SAIC contract study, "Labor Costs for
National Drinking Water Rules (2003) updated to 4th Qtr 2006. Appendix
H-23. III.F(c)(3) Press Releases: Cost for Press Releases for CWSs that
Exceed the Lead Action Level (4th Qtr 2006$)

System Size Category	# Systems that Exceed Lead AL [1,2]	Annual System
Burden for Press Release (hrs) [3]	Annual System Labor Cost [4]	Annual
System O&M Cost [5]	Total Annual System Costs

CWS	 	 	 	 	 

25-100	185	0	$0	$0	$0

101-500	155	0	$0	$0	$0

501-3,300	133	0	$0	$0	$0

3.3K-10K	54	-54	-$1,834	-$232	-$2,066

10K-50K	40	-40	-$1,384	-$172	-$1,556

50K-100K	7	-7	-$242	-$30	-$272

>100K	7	-7	-$275	-$30	-$305

Total	581	-108	-$3,734	-$464	-$4,198

Notes

1.  Additional requirements affect only CWSs that exceed the lead action
level.  For systems serving <3,300 people, the # systems is based on
SDWIS/Fed data for the monitoring period ending after January 2003.(Data
source: USEPA Survey of States - Questions on State Implementation of
Lead and Copper Rule. July 2004). 

2.  For systems serving >3,300 people, the # systems is based on systems
that have exceeded the lead action level since 2003. data source:
www.epa.gov/safewater/lcrmr/lead-data.html, 8/30/05. 

3.  Systems serving more than 3,300 people that have exceeded the lead
action level have a reduced burden as compared to current requirements. 
Current requirements are 2 public service announcements (PSAs) and 1
press release (PR) to 8 entities. New requirements are 2 PRs to 8
entities. Assume 1 hour of burden per system for each PSA or PR per 2004
ICR. Therefore, the burden for new requirements equals one less hour per
system as compared to current requirements.

4.  Loaded wage rates from SAIC contract study, "Labor Costs for
National Drinking Water Rules (2003) updated to 4th Qtr 2006. 

5.  The reduced burden for annual system O&M cost equals the materials
and postage for 10 PSAs (5 to TV and 5 to radio stations) at $0.43 each
($0.39 postage, $0.01 paper and $0.03 envelope) for a total savings of
$4.30 per system.

Appendix H-24. III.F(e) CCR Statement: Cost to Add Statement to
Consumer Confidence Report for CWSs that Don’t Exceed the Lead Action
Level  (4th Qtr 2006$)

System Size Category	Total Number of CWSs [1]	# Systems that Exceed Lead
AL [2,3]	Additional Systems Affected by New Requirement [4]	Annual
System Burden to Add Statement to CCR (hrs) [5]	Annual System Labor Cost
Annual System O&M Cost	Total Annual System Costs

 	 	 	 	 	 	 	 

<100	13,766	185	13,581	3,395	$81,011	$0	$81,011

101-500	16,240	155	16,085	4,021	$103,346	$0	$103,346

501-3.3K	14,212	133	14,079	3,520	$96,934	$0	$96,934

3.3K-10K	4,707	54	4,653	1,163	$39,502	$0	$39,502

10K-50K	3,057	40	3,017	754	$26,090	$0	$26,090

50K-100K	484	7	477	119	$4,125	$0	$4,125

100K-500K	322	7	315	79	$3,089	$0	$3,089

500K-1M	32	 	32	8	$314	$0	$314

>1 M	18	 	18	5	$177	$0	$177

Total	52,838	581	52,257	13,064	$354,586	$0	$354,586

Notes:

1.  Number of CWS systems per SDWIS/FED Data 2004. 

2.  For systems serving <3,300 people, the # systems is based on
SDWIS/Fed data for the monitoring period ending after January 2003.(Data
source: USEPA Survey of States - Questions on State Implementation of
Lead and Copper Rule. July 2004). 

3.  For systems serving >3,300 people, the # systems is based on systems
that have exceeded the lead action level since 2003. data source:
www.epa.gov/safewater/lcrmr/lead-data.html, 8/30/05. 

4. Under the new requirement, all systems will have to include an
informational statement in their CCR. 

Currently, all systems whose 95th percentile sample is above the lead
action level include an informational statement in their CCR. The
estimated number of systems affected by this requirement are the total
number of systems affected by the LCR less the systems that exceed the
lead action level. These estimates are conservative because we are
including some systems that are already required to provide this
information in their CCR (systems whose 95 percentile sample exceeds the
lead action level).

5. Assume burden hours to add statement to Consumer Confidence Report
regarding lead issues will be 15 minutes per system, for all system
sizes.

Appendix H-25. Changes to State Burden for Review and Consultation
Activities (4th Qtr 2006$)

	Number of Affected States1	Net Change in State Burden (Hours)2,3,4,6
Labor Rate ($/hr)5	Total Labor Cost

Customer Notification Review	57	236	$43.52	$10,272

Review and Filing of Self-Certification Letter	57	58	$43.52	$2,529

Consultation on Activities	57	1,162	$43.52	$50,572

Total

1,456	 	$63,372

Notes:

1.  The LCR Regulatory Changes apply to 50 states, 6 territories and 1
Indian Tribe, for a total of 57 entities.

2.  States no longer have to approve changes for systems serving between
501 and 3,300 people.  Assume 0.5 hours savings for each of the 184
systems in this size category (Refer to Table 1 above). The total
reduction in burden equals 92 hours (184 * 0.5 hours). 

3. For customer notification, States need to review additional language
for 994 systems that are estimated to exceed the LAL at an estimated 20
minutes per system. The total new burden to States equals 328 hours (994
systems * 0.33 hours).The net new burden to States equals 328 hours
minus 92 hours equals 236 hours.

4.  State labor rate of $43.52/hour (Source: Information Collection
Request for Contaminant Occurrence Data in Support of EPA's Second Six
Year Review of National Primary Drinking Water Regulations (2006)).

5. For consultation on activities, review of cover content, discussion
of alternative mechanisms, and discussion of extending deadlines, States
need to review activities with CWSs that exceed the LAL once per year at
2 hours per year.

6. For review and filing of letter from CWSs that exceed the LAL
self-certifying that additional PE activities have taken place, States
will require .10 hours per system per year, based on similar activity
for the CCR.

Appendix I

Uncertainty Analysis for III.F(b)(2) Activities

Uncertainty Analysis for Choosing Activities III.F(b)(2)(i)-(viii)

Due to the uncertainty in predicting the selection of activities (i)
through (viii) by systems to comply with Regulatory Change III.F(b)(2),
three alternative selection scenarios have been developed to illustrate
the potential range of costs.  The three scenarios represent predicted
activity selection based on different considerations:

Cost as the sole consideration

Cost as a primary consideration, with other factors as a secondary
considerations

Other factors as a primary consideration.

Cost as the sole consideration

	To simulate a situation in which cost minimization is the sole criteria
for choosing activities, this analysis assumes that systems will choose
the three least costly activities.  The average cost per system is
calculated as the average of the three least costly activities.  The
selection of activities and resulting average costs are presented in
Table I-1.

Table I-1: Activity Selection and Resulting Average Cost Per System:

Cost as Sole Consideration (4th Qtr 2006$)

System Size

Category	(i) Public Service Announcements	(ii) Paid Advertisements	(iii)
Display in Public Areas	(iv) Internet Notification	(v) Public Meetings
(vi) Delivery to Every Household	(vii) Targeted Contact	(viii) Materials
Directly

to Multi-Family & Institutions	Weighted Average Cost Per System

25-100	0%	0%	33%	0%	0%	33%	0%	33%	$14

101-500	0%	0%	33%	33%	0%	0%	0%	33%	$22

501-3,300	0%	0%	0%	33%	0%	0%	33%	33%	$30

3.3K-10K	0%	0%	0%	33%	0%	0%	33%	33%	$182

10K-50K	0%	0%	33%	0%	0%	0%	33%	33%	$355

50K-100K	0%	0%	0%	33%	0%	0%	33%	33%	$560

>100K	33%	0%	0%	33%	0%	0%	33%	0%	$999

	Although cost is an important consideration, it is not usually the sole
consideration.  Systems may choose more costly activities to reach a
broader range of audiences in a more effective manner.  To simulate a
situation in which cost is a primary , but not the sole, factor for
choosing activities, this analysis assumes that less costly activities
are more likely to be chosen and the more costly activities will be
chosen, but at a lower rate.  For each system size category, the
activities are characterized as “more likely”, “likely”, and
“unlikely” to be chosen based on the cost per system.  The two
lowest cost activities are classified as “more likely”, the two
highest cost activities are classified as “unlikely” and the middle
four activities are classified as “likely”.  To calculate a weighted
average cost per system given the activity choices, more likely
activities are assigned a probability of 25 percent (i.e., the activity
is chosen 25 percent of the time), likely activities are assigned a
probability of 10 percent, and the unlikely activities are assigned a
value of 5 percent.  The resulting selection of activities and weighted
average cost per system are presented in Table I-2.

Table I-2: Activity Selection and Resulting Average Cost Per System:

Cost as the Primary (but not sole) Consideration (4th Qtr 2006$)

System Size

Category	(i) Public Service Announcements	(ii) Paid Advertisements	(iii)
Display in Public Areas	(iv) Internet Notification	(v) Public Meetings
(vi) Delivery to Every Household	(vii) Targeted Contact	(viii) Materials
Directly

to Multi-Family & Institutions	Weighted Average Cost Per System

25-100	5%	5%	10%	10%	10%	25%	10%	25%	$28

101-500	5%	5%	10%	25%	10%	10%	10%	25%	$35

501-3,300	10%	5%	10%	25%	10%	5%	10%	25%	$62

3.3K-10K	10%	10%	10%	10%	5%	5%	25%	25%	$184

10K-50K	5%	10%	10%	10%	5%	10%	25%	25%	$608

50K-100K	10%	5%	10%	25%	5%	10%	25%	10%	$1,202

>100K	10%	5%	10%	25%	5%	10%	25%	10%	$2,325

	The third scenario reflects a best guess estimate of activity choices
if cost were not a factor.  The members of the NDWAC working group were
asked to rank the activities on a scale of 1-8, with 1 representing
activities most likely to be chosen and 8 for activities least likely to
be chosen within each system size category.  The NDWAC working group
members were not provided information on the cost per system, so their
responses reflect considerations other than cost.  Due to time
constraints, only a limited number of responses were received.  The
rankings were averaged across the responses, so that each activity had
an average ranking.  The activities with the two lowest average ranking
were characterized as most likely and assigned a probability of 25
percent.  The activities with the two highest average ranking were
considered unlikely and assigned a probability of 5 percent.  All other
activities were considered likely and assigned a probability of 10
percent.  The resulting activity choices and weighted average cost per
system are displayed in Table I-3.

Table I-3: Activity Selection and Resulting Average Cost Per System:

Other Factors as the Primary Consideration (4th Qtr 2006$)

System Size

Category	(i) Public Service Announcements	(ii) Paid Advertisements	(iii)
Display in Public Areas	(iv) Internet Notification	(v) Public Meetings
(vi) Delivery to Every Household	(vii) Targeted Contact	(viii) Materials
Directly

to Multi-Family & Institutions	Weighted Average Cost Per System

25-100	10%	5%	25%	5%	10%	25%	10%	10%	$33

101-500	10%	5%	25%	10%	10%	25%	5%	10%	$40

501-3,300	10%	5%	25%	10%	10%	25%	5%	10%	$101

3.3K-10K	10%	10%	25%	25%	5%	10%	5%	10%	$268

10K-50K	10%	25%	10%	25%	5%	10%	10%	5%	$824

50K-100K	10%	25%	10%	25%	5%	10%	10%	5%	$2,134

>100K	25%	25%	10%	10%	5%	10%	10%	5%	$3,043

	Table I-4 summarizes the weighted average cost per system for each
system size and for each of the three scenarios.  Across all system
sizes, the weighted average cost per system is lowest for the scenario
in which activities are chosen with cost as the only consideration and
highest when other factors are the primary consideration. Table I-4 also
displays the total costs for III.F(b)(2) for each scenario.  It should
be noted that the total cost under the highest of the three scenarios,
the other factors as the primary consideration scenario at $276,952 is
lower than the cost of III.F(b)(2) reported in the main section of the
Economic Analysis ($292,700) based on an un-weighted average of all
activities.  Thus, the costs reported in the Economic Analysis may
overstate actual costs that will be experienced.

Table I-4:  Summary of Average Cost Per System and Resulting Total Costs
(4th Qtr 2006$)

System Size	Weighted Average Cost Per System

	Cost as Sole Consideration	Cost as Primary Consideration	Other Factors
Primary Consideration

25-100	 $                14 	 $               28 	 $                33 

101-500	 $                22 	 $               35 	 $                40 

501-3,300	 $                30 	 $               62 	 $              101

3.3K-10K	 $               182 	 $              184 	 $              268 

10K-50K	 $               355 	 $              608 	 $              824 

50K-100K	 $               560 	 $           1,202 	 $           2,134 

>100K	 $               999 	 $           2,325 	 $           3,043 

Total Costs	 $        114,997 	 $       195,532 	 $        276,952 

Appendix J

Derivation of Direct Costs for Regulatory Change III.A

Appendix J-1: Regulatory Change III.A One-Time System Reporting Cost
(4th Qtr 2006$)

11 States that Favor 1 Sample & Alaska	# NTNCWS By State [1]	% of 
NTNCWS With <5 taps [2]	# NTNCWS With <5 taps	CWS Serving <100 By State
[1]	% of CWS<100 With <5 taps [6]	# of CWS <100 With <5 taps	Total
Systems with <5 Taps	One-Time System Burden for Verification Letters [3]
One Time System Labor Cost for Verification Letters [4]	One-Time System
O&M Costs for Verification Letters [5]	Total System One-Time Cost for
Verification Letters [5]

AK	N/A	N/A	N/A	341	5%	17	17	17	$472	$7	$479

IN	686	53%	364	317	5%	16	380	380	$10,551	$163	$10,714

MI	1631	53%	864	744	5%	37	901	901	$25,016	$387	$25,403

WI	907	53%	481	592	5%	30	511	511	$14,188	$220	$14,407

IL	405	53%	215	670	5%	34	249	249	$6,913	$107	$7,020

TX	785	53%	416	2105	5%	105	521	521	$14,465	$224	$14,689

VT	234	53%	124	319	5%	16	140	140	$3,887	$60	$3,947

UT	63	53%	33	241	5%	12	45	45	$1,249	$19	$1,269

WA	315	53%	167	1748	5%	87	254	254	$7,052	$109	$7,161

MD	573	53%	304	327	5%	16	320	320	$8,885	$138	$9,022

MN	563	53%	298	484	5%	24	322	322	$8,940	$138	$9,079

TN	46	53%	24	151	5%	8	32	32	$888	$14	$902

Total	6208	 	3290	8039	 	402	3692	3692	$102,507	$1,588	$104,094

Notes:

(1) Number of NTNCWSs and CWSs <100 in States derived from "SDWISFED
GPRA, summ inv, compl trends, FY96-04 FINAL" at
http://www.epa.gov/safewater/data/pivottables.html

(2) Percent of small systems with <5 taps from data supplied by MI in
comments to the draft LCRSTR.

(3) Assumes 1 hour per system to verify number of taps, prepare letter,
and submit to State

(4) Assumes average labor cost per hour for small systems of $27.76

(5) Assumes O&M cost equals $0.43 per letter ($0.39 postage, $0.01 paper
and $0.03 envelope).  

(6) Assumes relatively rare occurrence of CWSs with fewer than 5 taps:
5% Appendix J-2: Regulatory Change III.A One-Time State Review Cost
(4th Qtr 2006$)

Number of Letters for State Review	One-Time Burden for State Review of
Verification Letters [1]	State Labor Cost to Review and Document Number
of Taps [2]	State O&M Costs to Mail Approval Letter	Total One-Time State
Costs

3692	3692	$160,681	$1,588	$162,269

Notes:

(1) Assumes 1 hour of State labor required to review and track letters
from NTNCWSs with <5 taps

(2) Assumes State labor costs of $43.52per hour.

Appendix K

Derivation of Revenue Estimates for Small Systems

Revenue Estimates of Community Water Systems Serving 

10,000 or Fewer People 

Contract No.  68-C-02-069

Work Assignment No.  4-09

Prepared for:

Mr. Brian Rourke, Work Assignment Manager

U.S. Environmental Protection Agency

Office of Ground Water and Drinking Water

1201 Constitution Ave, NW, EPA East

Washington, DC 20460-0003

Prepared by:

The Cadmus Group, Inc.

57 Water Street

Watertown, MA 02472

July 12, 2007

This document provides an estimate of community water system (CWS)
revenue for systems serving 10,000 or fewer people.  The estimates are
based on two sources of information:  EPA’s 2000 CWS Survey and the
2002 Census of Governments fielded by the Census Bureau.  CWS revenue
and municipal government revenue for publicly owned CWSs are combined to
provide an estimate of the total resources available to CWSs serving
10,000 or fewer people. 

CWS revenue comes from three sources:  

Water sales.  This revenue is generated by the sale of water to
customers and is usually based on a rate charged per unit of water sold.

Water-related revenue.  This revenue consists of transfers from
municipal government general funds, fees, penalties, or other charges
related to the provision of water, but not tied directly to the sale of
water.  Note:  Water sales and water-related revenue together are
referred to as “water revenue.”  

Non-water revenue.  Systems also may have non-water revenue.  For
example, combined drinking water and wastewater systems may have revenue
from sewerage charges. These sources of revenue are excluded from this
analysis, with two important exceptions.  Ancillary systems – small
privately owned systems (generally, serving populations of 3,300 or
fewer people) that provide water as an essential part of another
business – will have revenue from their primary business and often do
not report any water revenue at all. Municipal governments may rely on
general revenue in addition to or in lieu of water revenue to finance
their systems.  In many cases, these sources of revenue are available to
systems to support their operations; therefore, they must be included to
fully account for the resources available to water systems.  

Exhibit 1 reports revenue of systems by the source of revenue and the
size of the system.  The estimates are based on data from the 2000
Community Water System Survey (CWSS) and the 2002 Census of Governments.
 For each source, it reports the average revenue for systems with that
source of revenue in the top portion of the table; in other words, it
excludes systems with zero revenue from that source.  The middle portion
of the table shows the number of systems in the nation with that source
of revenue.  The bottom portion of the table reports the number of
observations in the sample on which the estimates are based.  (Because
the exhibit excludes systems that report zero revenue from each source,
the revenue figures from each source cannot be summed to reach the
total.  See below for a more detailed explanation.)  

Exhibit 1:  Average Revenue of Community Water Systems Serving 10,000
or fewer 

People by Source (Dollars are in 2006 Dollars)

 

 

Population Served	Water Revenue	Non-water

Revenue of

Privately Owned Ancillary Systems	Municipal Non-

water System 

Revenue (Net of Transfers to Water System)	Total Revenue,

Including 

Municipal Government Revenue1

	 

Water Sales Revenue	Water Related Revenue 	Total Water Revenue1

	General Fund Transfers	Other Water Related Revenue	Total Water Related
Revenue1

Mean Revenue

25-100	10,207	9,356	8,733	8,735	12,067	561,670	139,709	219,745

101-500	36,797	7,325	5,506	5,976	40,152	2,917,969	274,364	792,880

Subtotal, 25-500	26,979	7,346	6,084	6,472	29,753	1,641,430	266,141
552,581

501-3,300	197,270	25,602	29,641	31,129	220,212	3,429,775	1,481,239
1,447,859

3,301-10,000	806,916	255,226	104,241	119,406	924,690	687,113,152
6,159,156	12,642,535

Subtotal, 25-10,000	191,252	61,519	35,894	39,581	218,702	5,843,880
2,068,030	2,166,712

Number of Systems

25-100	6,511	4	1,355	1,359	8,056	3,736	345	10,118

101-500	11,121	399	6,206	6,206	12,772	3,160	5,307	14,015

Subtotal, 25-500	17,632	403	7,561	7,565	20,828	6,896	5,652	24,133

501-3,300	13,333	747	10,159	10,288	13,673	13	10,954	13,250

3,301-10,000	4,574	251	4,227	4,227	4,852	43	4,060	4,628

Subtotal, 25-10,000	35,540	1,401	21,947	22,080	39,353	6,951	20,667
42,011

Observations

25-100	81	1	23	24	101	32	11	112

101-500	119	4	72	72	138	24	68	141

Subtotal, 25-500	200	5	95	96	239	56	79	253

501-3,300	201	11	163	165	205	1	172	200

3,301-10,000	155	11	143	143	166	1	139	157

Subtotal, 25-10,000	556	27	401	404	610	58	390	610

1. While each row is based on the most accurate information available,
columns do not sum.  See the Basis of Estimate below for additional
information about this table.  

Source:  2000 Community Water System Survey questions 26 and 27.

	US Census Bureau's 2002 Census of Governments (Volume 4, Number 4),
Table 13.

Many systems do not have each source of revenue.  Exhibit 2 reports the
percentage of systems that reported positive revenue from each revenue
source.  According to the CWSS, approximately 82 percent of systems
reported revenue from water sales.  Less than 3 percent reported
transfers from the general fund (the percentage is higher for publicly
owned systems), and 51 percent reported other water-related revenue. 
Overall, 80 percent of systems reported revenue from water sales or
water related revenue.  

Judging from the percentage of systems reporting, it would appear that
fewer systems reported positive water revenue than reported positive
water sales.  This apparent contradiction is due to different response
rates to the various revenue questions in the survey.  Some systems
reported water sales, but could not provide their water-related revenue.
 Total water revenue for these systems therefore was not available and
these systems are excluded from the estimate of the percentage of
systems reporting positive total water revenue.  Other systems reported
their total water revenue, but could not distinguish between water sales
and other water revenue.  They are included in the estimate of the
percentage of systems that reported positive water revenue but are not
included in any of the components.  If we limit the analysis to systems
that provided data on all revenue components, approximately 81 percent
of systems reported positive water revenue.  Less than 1 percent of
these systems reported zero water sales revenue.  (In other words, they
relied solely on water-related revenue.)

Approximately 20 percent of small systems do not charge directly for
water, either through water sales or water-related charges.  Among some
subclasses of systems, the percentage of systems that do not charge for
water is substantially higher.  For example, according to the CWSS, 92
percent of ancillary systems reported zero water revenue.  Systems
without water revenue may rely – directly or otherwise – on other
sources of revenue.  

Exhibit 2. Percentage of Systems Reporting Positive Revenue, by Revenue
Source and Population Served

 	Water Revenue	Non-water

Revenue of

Privately Owned Ancillary Systems	Municipal Non-

water System 

Revenue (Net of Transfers to Water System)

 	 	Water Related Revenue	 

Population Served	Water Sales Revenue	General Fund Transfers	Other Water
Related Revenue	Total Water Related Revenue1	Total Water Revenue1

25-100	60.8%	0.0%	12.5%	12.5%	59.2%	36.1%	3.4%

101-500	77.9%	2.4%	44.1%	44.1%	74.6%	22.2%	37.9%

Subtotal, 25-500	70.6%	1.4%	30.4%	30.4%	68.1%	28.1%	23.4%

501-3,300	97.6%	5.3%	76.0%	77.0%	97.5%	0.1%	82.7%

3,301-10,000	95.8%	5.0%	89.5%	89.5%	95.8%	0.9%	87.7%

Subtotal, 25-10,000	81.8%	2.9%	51.0%	51.3%	80.25%	15.93%	49.2%

1. While each row is based on the most accurate information available,
columns do not sum.  See the Basis of Estimate below for additional
information about this table.  

Source:  EPA’s 2000 Community Water System Survey, questions 26 and
27.

Sources of Data 

The 2000 CWSS collects data on all three sources of revenue.  It asks
each system for water sales and water-related revenue.  The survey also
asks ancillary systems to report non-water related revenue because many
of these systems do not charge directly for water.  (The survey does not
ask for non-water revenue of other systems.)  Because so many ancillary
systems do not charge for water, estimates of the resources available to
these systems include survey data from their main source of revenue.    

The 2000 CWSS collected data from 104 ancillary systems.  The response
rate on the question about non-water revenue was relatively low;
approximately 50 percent of these systems provided data on their
non-water revenue.  It is not clear whether this non-response introduces
bias into the estimate of non-water revenue of ancillary systems.  The
revenue reported also varies greatly.  

While some of the ancillary systems are small water systems, often
mobile home parks, they also may be relatively large companies and their
water revenue may be a very small part of their total revenue.  Other
ancillary systems may have very limited revenue from their other
sources.  Mobile home parks, for example, may fund all their expenses
– water-related and other wise – from pad fees that may be quite
modest.  The estimates of non-water revenue of ancillary systems are
therefore not precise.  

Approximately 6 percent of publicly owned systems serving 10,000 or
fewer people report zero water revenue in the survey; nearly half of
publicly owned systems serving 100 or fewer people report zero water
revenue.  For these systems to operate, they must have other sources of
revenue that are not included in the survey.  Even systems run as public
enterprise funds may have access to funds from the general fund of their
municipality.  Therefore, estimates of water revenue do not fully
describe the financial resources available to these systems.  To account
for this potential resource of publicly owned systems, therefore, data
from the US Census Bureau’s 2002 Census of Governments were used to
estimate total municipal revenue of cities and towns that provide water
to 10,000 or fewer people.  Non-water revenue of municipalities is the
difference between the total revenue of the municipality and the revenue
generated by its water system.  Many municipalities transfer money from
their general funds to their water systems.  To avoid double counting
these transfers, they are excluded from the estimate of municipal
non-water revenue and included as part of water revenue.  

Basis of the Estimates

The 2000 CWSS sample is used to calculate the average water system
revenue estimates.  The estimates are weighted by the inverse of the
sampling probabilities, corrected for overall non-response.  Four
systems were dropped from the analysis because they were outliers
(resorts or other special cases).  If they had been included, the
revenue estimates would have been higher. 

Not every system reported revenue from each source in the CWSS.  For
example, of the 610 systems that reported revenue from any source, 54
did not report positive water sales revenue.  These systems are excluded
from the calculation of average water sales revenue.  Therefore, total
revenue is not equal to the sum of revenue from each source.  Before we
can sum the components, we must account for systems that did not report
revenue from an individual revenue source.  

Exhibit 3 summarizes how water revenues are calculated based on the
average revenue reported for each source and the percentage of systems
with each source of revenue.  (Details may not sum to the total due to
rounding.) The calculation can be divided into two parts.  The first
part is shown in lines A through I.  We sum the sources of revenue,
adjusting for systems that reported zero revenue from each source.  For
example, the average water sales revenue of all systems with water sales
is $191,252 (line A, the last column).  Approximately 82 percent of
systems reported positive water sales (line B).  The average water sales
revenue of all systems, including those reporting zero water sales
revenue, is $156,538, or line A multiplied by line B.  This calculation
is repeated for general fund transfers (lines D through F) and other
water-related revenue (lines (G through I).  The sum of these products
is $176,658, and is shown in line J (i.e., the sum of lines C, F, and
I).  

The second part of the calculation is shown in lines J through M in
Exhibit 3.  We make two adjustments to the sum shown in line J.  First,
we account for systems that reported revenue from only one or two of the
three sources of revenue.  For example, some systems reported their
water sales revenue but did not know how much general fund or other
water-related revenue the received.  While we can estimate their water
sales revenue, their total revenue is unknown.  We must exclude systems
that did not report revenue from water sales, general fund, and other
water-related revenue when we derive water revenue to ensure it includes
revenue from all sources.  Furthermore, some systems reported total
water revenue, but could not divide their revenue by source.  These
systems are included in the estimate of water revenue, but excluded from
the estimates of one or more of the components of revenue.  The net
effect of these adjustments is -$1,141 for all systems (line K).  This
must be added to the total on line J.  

Second, approximately 20 percent of all systems that did not report
water revenue (line M).  These systems must be removed to estimate the
average water revenue of systems with positive water revenue.  Line N
reports the adjusted total water revenue of systems with water revenue. 

As we cannot distinguish between systems that did not respond to a
revenue question and systems who, in fact, have zero revenue to report,
we may be over-estimating the percentage of systems with no revenue for
any given revenue category.  Thus, in calculating the average revenue
for all small systems, we may be underestimating revenue by assuming
that a non-response equals a zero.   

Exhibit 3.  Calculation of Average Total Water Revenue

Population Served

25-100	101-500	Subtotal, 

25-500	501-3,300	3,301-10,000	Total, 

25-10,000

A	Average Water Sales Revenue of Systems Reporting Positive Water Sales
Revenue:	10,207	36,797	26,979	197,270	806,916	191,252

B	Percentage of Systems Reporting Positive Water Sales Revenue	60.8%
77.9%	70.6%	97.6%	95.8%	81.8%

C	Average Water Sales Revenue (A*B)	6,205	28,672	19,040	192,499	773,148
156,538

	D	Average Transfers from the General Fund of Systems Reporting Positive
General Fund Transfers:	9,356	7,325	7,346	25,602	255,226	61,519

E	Percentage of Systems Reporting Positive Water-Related Revenue that
Reported General Fund Transfers	0.0%	2.4%	1.4%	5.3%	5.0%	2.9%

F	Average General Fund Revenue (D*E)	3	177	102	1,365	12,687	1,796

	G	Average Other Water-Related Revenue of Systems Reporting Positive
Other Water-Related Revenue:	8,733	5,506	6,084	29,641	104,241	35,894

H	Percentage of Systems Reporting Positive Water-Related Revenue that
Reported Other Water-Related Revenue	12.5%	44.1%	30.4%	76.0%	89.5%	51.0%

I	Average Other Water-Related Revenue (G*H)	1,091	2,429	1,847	22,535
93,340	18,323

	J	Sum of Average Water Sales, General Fund Transfers, and Other
Water-Related Revenue (C+F+I)	7,299	31,279	20,989	216,399	879,175
176,658

K	Adjust for systems not reporting all components of water system
revenue	-153	-1,311	-735	-1,749	6,905	-1,141

L	Percentage of Systems Reporting Positive Water Revenue	59.2%	74.6%
68.1%	97.5%	95.8%	80.3%

M	Average Water Revenue of Systems Reporting Positive Water Revenue
(J+K)/L	12,067	40,152	29,753	220,212	924,690	218,702

The non-water revenue of publicly owned systems is based on the Bureau
of the Census estimate of total revenue of municipalities with fewer
than 10,000 people.  Exhibit 4 shows how we estimate the non-water
system revenue of municipalities.  According to the 2002 Census of
Governments, there were 16,745 municipalities (line B of exhibit 4) with
populations under 10,000 in 2002.  The total revenue of these
municipalities was $34,944,647,000 in 2002 (line A).  Average revenue
per municipality is line A divided by line B, or $2,086,871 (line C). 
Based on the US Bureau of Labor Statistics, Consumer Price Index, the
cumulative change in consumer prices between 2002 and 2006 was 13.8
percent (line D). The inflation-adjusted estimate is $2,375,157, shown
in line E.  

Exhibit 4:  Calculation of Non-water System General Fund Revenue 

of Publicly Owned Systems

A	Total General Revenue for Municipalities with fewer than 10,000 people
34,944,647,000

B	Number of Municipalities	16,745

C	Average Revenue per Municipality (A/B)	2,086,871

D	Percentage Change in Consumer Price Index, 2002-2006	13.8%

E	Inflation-Adjusted Revenue per Municipality [C*(1+D)]	2,375,157

The Census Bureau does not provide estimates of municipal revenue for
each of the size categories we use.  To estimate municipal revenue for
each size category, we assume it is proportional to the publicly owned
systems’ water revenue.  The calculation is shown in Exhibit 5. 
Column 1 of the table shows the estimate of water revenue of publicly
owned systems, by the size of the system.  (These estimates are derived
from the survey data.)  Column 2 shows the ratio of average water
revenue for each size category to the average water revenue for all
systems serving populations of 10,000 or less.  This ratio is multiplied
by the inflation-adjusted revenue per municipality, or $2,375,157 to
arrive at the estimate of municipal revenue for each size category. 
This result is shown in column 3.  

Exhibit 5.  Calculation of Non-water System General Fund Revenue of
Publicly Owned Systems by System Size

	(1)	(2)	(3)

Population Served	Water Revenue	Average Water Revenue of Systems in Each
Size Category in Column 1 Divided by Revenue of All Systems Serving
10,000 or Fewer People	Muanicipal Revenue

(Average municipal revenue (line E from exhibit 3) multiplied by the
percentage in column 2)

25-100		20,748		0.068		160,458

101-500		40,746		0.133		315,110

Subtotal, 25-500		39,525		0.129		305,666

501-3,300		219,981		0.716		1,701,220

3,301-10,000		914,708		2.978		7,073,864

Total		307,127		1.000		2,375,157

Source:  EPA’s 2000 Community Water System Survey, question 26. 

Total revenue is a weighted average of system revenue and non-system
revenue.  The calculation is shown in Exhibit 6.  Line A reports total
water system revenue for systems that report positive revenue (from
exhibit 3).  Lines B, C, and D calculate average municipal general fund
revenue of publicly owned systems, net of system revenue and transfers
to the system.  Lines E, F, and G calculate the percentage of systems
that are publicly owned and potentially have access to municipal
revenue.  

We assume that privately owned systems that provide water as an
essential part of another business have non-water revenue.  According to
the CWSS, average non-water revenue for small systems that report it is
$5,843,880 (the last column of line H).  The CWSS reports that 16.3
percent of small systems have this non-water revenue (line I).  

The resources available to water systems is the weighted average of
water revenue, municipal revenue for publicly owned systems, and
non-water revenue of privately owned systems.  Column J of exhibit 6
shows how total system revenue is calculated.  Exhibit 6.  Calculation
of Total Revenue

Population Served

25-100	101-500	Subtotal, 

25-500	501-3,300	3,301-10,000	Total, 

25-10,000

A	Average Water Revenue of Systems Reporting Positive Water Revenue
(Line M from Exhibit 3)	12,067	40,152	29,753	220,212	924,690	218,702

	B	Total General Revenue for Municipalities with fewer than 10,000
people (from Exhibit 5)	160,458	315,110	305,666	1,701,220	7,073,864
2,375,157

C	Total System Revenue of Publicly Owned Systems	20,748	40,746	39,525
219,981	914,708	307,127

D	Municipal Revenue, Net of Water System Revenue and Transfers to the
Water System (B-C)	139,709	274,364	266,141	1,481,239	6,159,156	2,068,030

	E	Number of Publicly Owned Systems	345	5,307	5,652	10,954	4,060	20,667

F	Number of Privately Owned Systems	9,773	8,708	18,481	2,296	567	21,344

G	Percentage of Systems that are Publicly Owned [E/(E+F)]	3.4%	37.9%
23.4%	82.7%	87.7%	49.2%

	H	Average Non-water Revenue of Private Systems Reporting Positive
Non-Water Revenue	561,670	2,917,969	1,641,430	3,429,775	687,113,152
5,843,880

I	Percentage of Systems Reporting Positive Non-water Revenue	36.1%	22.2%
28.1%	0.1%	0.9%	15.9%

	J	Total Revenue (A+D*G+H*I)	219,745	792,880	552,581	1,447,859
12,642,535	2,166,712

Conclusions

The average revenue available to small systems serving 10,000 or fewer
people is $2,166,712.  This estimate includes revenue from all sources. 
This estimate includes non-water business and government revenue that
will be used for purposes other than financing the operations of the
water system.  But it provides the best estimate of the financial
situation of these water systems.  

Efforts to estimate the resources available to small water systems are
complicated by several factors.  First, there are few sources of data on
small systems.  The CWSS is one of the only surveys to systematically
collect data on small system finance.  Its focus is system operations
and finance, so it does not collect information about non-water system
finance that would inform this analysis.  The Census of Government data
fill some of the gaps and help portray a complete picture of small
system finance.  

Second, small systems are a relatively diverse group that finances its
operations many different ways.  Some charge directly for water, but
many do not.  For example, a homeowners’ association may provide water
as one of its services, but it may not charge its members a separate
water fee; rather, it pays its water-related expenses out of general
fees its charges its members.  A small town may pay for water services
out of general fund revenue and not charge its residents for water.  The
water revenue, as we define it, is in fact zero in both cases.  But both
the homeowners’ association and the small town have resources to pay
for repairs and improvements to their water system.  Other demands are
placed on these resources, so further analysis is required to determine
whether those resources are sufficient to meet the needs of the water
system.  

Finally, the data that are available on small system finances are often
incomplete.  This is due, in part, to the relative complexity of small
system finance.  Systems may not respond to financial questions because
it is difficult to distinguish water- from non-water-revenue.  As shown
in Exhibit 2, some systems provided data on some sources of revenue but
not others.  To produce the best estimates, we use all the data
available for each question rather than limiting the analysis to only
those systems that answered all the questions.  These estimates provide
the best estimates available of the resources available to small
systems.  

References

US Bureau of Labor Statistics, Consumer Price Index, series CUUR0000SA0,
accessed at   HYPERLINK "http://data.bls.gov/cgi-bin/surveymost on
3/15/07"  http://data.bls.gov/cgi-bin/surveymost on 3/15/07 .  

US Census Bureau, 2002 Census of Governments (Volume 4, Number 4), Table
13, accessed at   HYPERLINK "http://www.census.gov/govs/www/cog2002.html
on 7/16/06"  http://www.census.gov/govs/www/cog2002.html on 7/16/06 .  

US Environment Protection Agency, 2000 Community Water System Survey,
questions 26 and 27, estimated using sample data.  



 Appendix L

Summary of Differences Between the Proposed and Final Rule

Appendix L-1: Summary of Differences Between the Proposed and Final
Rule

(Differences Are Highlighted)

Provision	July 2006 Proposed Revisions	Final Rule Revisions

A. Minimum # of Samples Required	Clarifies the minimum number of samples
requirement (five).	Clarifies the minimum number of samples requirement
(five).  Allows State discretion to allow PWS to sample 100 percent of
taps if there are fewer than five taps that can be used for human
consumption in the system.

B. Definitions for Compliance and Monitoring Periods	Clarifies that
“compliance period” is a 3-year calendar year period as defined in
141.2.

“Monitoring period” is specific period in which a water system must
provide required monitoring (e.g., June – September).

Also will define more precisely when the “start date” for compliance
calendar and actions occur.

Systems on triennial monitoring must monitor once every 3 calendar
years.	Clarifies that “compliance period” is a 3-year calendar year
period as defined in 141.2.

“Monitoring period” is specific period in which a water system must
provide required monitoring (e.g., June – September).

Also will define more precisely when the “start date” for compliance
calendar and actions occur.  States have discretion to extend deadlines
for completing public education activities.

Systems on triennial monitoring must monitor once every 3 calendar
years.

C. Reduced Monitoring Criteria	Systems that meet water quality
parameters must also meet the Lead Action Level, but not necessarily the
Copper Action Level to go to reduced monitoring.

Copper will be dealt with during next set of revisions.	Systems that
meet water quality parameters must also meet the Lead Action Level, but
not necessarily the Copper Action Level to go to reduced monitoring.

Copper will be dealt with during next set of revisions.

D. Advanced Notification and Approval for Treatment Changes	Systems must
provide notice of change or source addition in advance and the State
must approve the change.	Systems must provide notice of long-term change
or source addition in advance and the State must approve the change.

E. Consumer Notice of Lead Tap Results	Systems must notify consumers who
occupy homes or buildings tested with results.	Systems must notify
consumers who occupy homes or buildings tested with results.



Provision	July 2006 Proposed Revisions	Final Rule Revisions

F. Public Education Requirements	Content – shortened introductory
statement and flexibility on body of statement, changed health effects
language.

Delivery – Add licensed child care centers, preschools, Ob-Gyns, and
midwives to list of organizations.  Include a cover letter

-Systems directly contact local health agencies by phone or in person

- Additional activities: >3,300 pick 3, <3,300 pick 1: public service
announcements, paid ads, information displays in public areas, using
internet or email, public mtgs, delivery to every household, individual
contact with customers, materials to multi-family homes and
institutions, other methods approved by State

-Systems exceeding Lead Action Level must: include information on water
bill as long as they have the exceedance; must post public education
material on website if they serve >100,000; issue 2 press releases per
year.  No public service announcements required

Timeframe – systems must deliver most public education materials
within 60 days after end of monitoring period in which exceedance
occurred.  Flexibility for State to allow longer for completion of water
bill delivery and selected additional activities

CCR – all CWS that detect lead must include informational statement. 
NDWAC recommended changes to statement language.	Content – shortened
introductory statement and flexibility on body of statement, changed
health effects language.

Delivery – Add licensed child care centers, preschools, Ob-Gyns, and
midwives to list of organizations.  Include an informational notice

-Systems directly contact local health agencies by phone or in person

- Additional activities: >3,300 pick 3, <3,300 pick 1: public service
announcements, paid ads, information displays in public areas, using
internet or email, public mtgs, delivery to every household, individual
contact with customers, materials to multi-family homes and
institutions, other methods approved by State

-Systems exceeding Lead Action Level must: include information on water
bill as long as they have the exceedance; must post public education
material on website if they serve >100,000; issue 2 press releases per
year.  No public service announcements required

Timeframe – systems must deliver most public education materials
within 60 days after end of monitoring period in which exceedance
occurred.  Flexibility for State to allow longer for completion of all
activities

CCR – all CWS must include informational statement.  NDWAC recommended
changes to statement language.

G. Reevaluation of Lead Service Lines Deemed Replaced Through Testing
Applies to a system that (1) exceeds the action level, (2) tests out one
or more service lines, (3) brings lead levels below the action level for
two consecutive 6-month monitoring periods and discontinues replacing
lead service lines, and (4) later exceeds the action level again. That
system would have to reinitiate lead service line replacement
considering all lead service lines including those that had previously
tested out of the replacement program.	Applies to a system that (1)
exceeds the action level, (2) tests out one or more service lines, (3)
brings lead levels below the action level for two consecutive 6-month
monitoring periods and discontinues replacing lead service lines, and
(4) later exceeds the action level again. That system would have to
reinitiate lead service line replacement considering all lead service
lines including those that had previously tested out of the replacement
program.  Provision added for State discretion when systems have already
completed a 15-year replacement program.

H. Other Issues Related to LCR

Plumbing Component Replacement	Specifically define plumbing component
replacement as corrosion control treatment when 100% of plumbing
fittings and fixtures are directly controlled by the system.	No
revisions made.  Current rule provides flexibility for systems to
implement.

POU and POE Treatment	Specifically define POU/POE as corrosion control
treatment when 100% of taps are directly controlled by the system.	No
revisions made. Current rule provides flexibility for systems to
implement.

Site Selection in Areas with Water Softeners and POU	Allow lead and
copper tap samples at taps with POU/POE under certain conditions	No
revisions made. Monitoring issues will be dealt with during next set of
revisions.

Water Quality Parameter Monitoring	Synchronize water quality parameter
sampling with lead and copper sampling.	No revisions made. Monitoring
issues will be dealt with during next set of revisions.

 http://www.dcwasa.com/about/gen_overview.cfm

 ADMINISTRATIVE ORDER FOR COMPLIANCE ON CONSENT Docket No.
SDWA-03-2004-0259DS

 ADMINISTRATIVE ORDER FOR COMPLIANCE ON CONSENT Docket No.
SDWA-03-2004-0259DS

 DC WASA, 2004 DRINKING WATER QUALITY REPORT

 Forensic Analysis of Elevated Lead Levels in District of Columbia Water
and Sewer Authority Drinking Water: Task 5 Data Summary (Draft),
Prepared by HDR/EES, June 1, 2005

 Based on system inventory from 2nd Quarter 2005 SDWIS data pull.

	   HYPERLINK http://www.epa.gov/safewater/lcrmr/lead_data.html
http://www.epa.gov/safewater/lcrmr/lead_data.html  and Summary Lead
Action Level exceedances for medium (3,300-50,000) and large (>50,000)
public water systems (Updated as of June 1, 2004)

	 http://www.epa.gov/safewater/lcrmr/reductionplan_comparison.html

 Source: USEPA, State Responses to EPA Survey on State Implementation,
November 2005.

 Source: Drinking Water Lead Reduction Plan, EPA 810-F-05-001, March
2005, http://www.epa.gov/safewater/lcrmr/reductionplan_fs.html.

 70 FR 54375, US EPA, 2005.

 Lead and Copper Rule State File Review: National Report, EPA, March
2006

 Summary from Public Education Workshop, US EPA, 2004.

 http://www.epa.gov/safewater/data/pdfs/data_factoids_2004.pdf

 System inventory data from the 4th Quarter SDWIS/FED data pull is used
throughout the analysis to maintain consistency with data on the number
of systems exceeding the Lead Action Level collected during that time
period.

 System inventory data from the 4th Quarter SDWIS/FED data pull is used
throughout the analysis to maintain consistency with data on the number
of systems exceeding the Lead Action Level collected during that time
period.

 Updated data on the number of systems that have exceeded the Lead AL
are not available for use in the EA supporting the Final Rule.  Thus we
assume that this data reflects the current annual number of systems
exceeding the Lead AL and use 4th quarter 2004 SDWIS inventory data to
maintain consistency. 

  USEPA Survey of States - Questions on State Implementation of Lead and
Copper Rule. July 2004.

 USEPA Survey of States - Questions on State Implementation of Lead and
Copper Rule. July 2004.

 Source: Information Collection Request: Disinfectants/Disinfection
Byproducts, Chemical, and Radionuclides Rules, USEPA, Office of Water,
September 2004, page H-27.

 Source: Information Collection Request: Disinfectants/Disinfection
Byproducts, Chemical, and Radionuclides Rules, USEPA, Office of Water,
September 2004, page H-12.

 USEPA Survey of States - Questions on State Implementation of Lead and
Copper Rule. July 2004.

  USEPA Survey of States - Questions on State Implementation of Lead and
Copper Rule. July 2004.

  EPA, Public Water System Supervision Information Collection Request,
July 2004, Exhibit E.16, page E-15.

 M. Cubed for the National Child Care Association, The National Economic
Impacts of the Child Care Sector, Fall 2002, page 4.

 U.S. Census Bureau, U.S. Summary: 2000 (Census 2000 Profile), July
2002, http://www.census.gov/prod/2002pubs/c2kprof00-us.pdf.

 U.S. Census Bureau, Statistical Abstract of the United States: 2006,
Table 152, page 113.
http://www.census.gov/prod/2005pubs/06statab/health.pdf

 USEPA, Public Water System Supervision Information Collection Request,
July 2004, page B-6.

 USEPA Survey of States - Questions on State Implementation of Lead and
Copper Rule. July 2004.

 Source: Notes from the EPA Lead Service Line Replacement Workshop,
December 10, 2004,
http://www.epa.gov/safewater/lcrmr/pdfs/summary_lcmr_review_lead_line_re
placement_workshop_10-26-04.pdf

 Source: Lead Service Line Replacement Program Annual Report for 2003,
District of Columbia Water and Sewer Authority, September 2003.

  Source: Information Collection Request: National Primary Drinking
Water Regulations For Lead and Copper, USEPA, Office of Water, June
1999, page A-B-1.

 Source: Economic Analysis for the Filter Backwash Recycling Rule,
USEPA, Office of Water, EPA 816-R-01-20, July 2001, Appendix E-4.

  Source: Final Regulatory Impact Analysis of National Primary Drinking
Water Regulations for Lead and Copper, USEPA, Office of Drinking Water,
April 1991, page 1-4.

  The Bureau of Labor Statistics has discontinued calculating the
Employment Cost Index by SIC code classifications (electric, gas and
sanitary services).  The comparable NAICS classification is for
utilities.  Also, BLS changed the base year for calculating the index
(Dec 2005 = 1.00).  The change in series classification and index year
does not result in an appreciable difference in the updating.  For
example, the update factor from 2001 to 2003 used in the exhibit is 1.07
either using SIC or NAICS for the time period.

 Source: Lead and Copper Monitoring and Reporting Guidance for Public
Water Systems, USEPA, Office of Water, EPA-816-R-02-009, February 2002.

  Source: Final Regulatory Impact Analysis of National Primary Drinking
Water Regulations for Lead and Copper, USEPA, Office of Drinking Water,
April 1991, page 4-9.

  Source: Information Collection Request: National Primary Drinking
Water Regulations For Lead and Copper, USEPA, Office of Water, June
1999, page A-3.

  Source: Information Collection Request: Disinfectants/Disinfection
Byproducts, Chemical, and Radionuclides Rules, USEPA, Office of Water,
September 2004, page H-43.

 Updated using the CPI for 1999 to Dec 2006 (201.8/166.6=1.211)

  Source: Labor Costs for National Drinking Water Rules, SAIC, October
24, 2003, updated.

  Source: Information Collection Request: National Primary Drinking
Water Regulations For Lead and Copper, USEPA, Office of Water, June
1999, page A-11.

  Source: Information Collection Request: Disinfectants/Disinfection
Byproducts, Chemical, and Radionuclides Rules, USEPA, Office of Water,
September 2004, page H-27.

 Source: Information Collection Request: National Primary Drinking Water
Regulations For Lead and Copper, USEPA, Office of Water, June 1999, page
A-11.

  Source: Information Collection Request: Disinfectants/Disinfection
Byproducts, Chemical, and Radionuclides Rules, USEPA, Office of Water,
September 2004, page H-27.

 An estimate of the number of systems that may change treatment due to
the Ground Water Rule is not publicly available with sufficient
certainty at this time.

 Rogers, Everett, Diffusion of Innovation, Free Press; 4th edition
(February 1, 1995).

  Source: Information Collection Request: National Primary Drinking
Water Regulations For Lead and Copper, USEPA, Office of Water, June
1999, page A-7.

  Source: Information Collection Request: Disinfectants/Disinfection
Byproducts, Chemical, and Radionuclides Rules, USEPA, Office of Water,
September 2004, page H-2.

 Updated using the CPI for 1999 to Dec 2006 (201.8/166.6=1.211)

  Source: Labor Costs for National Drinking Water Rules, SAIC, October
24, 2003, updated.

 Community water system means a public water system which serves at
least 15 service connections used by year round residents or regularly
serves at least 25 year-round residents.

DRAFT

March 28, 2007

Page   PAGE  88 

Page   PAGE  3  

Page   PAGE  76  

Appendix A-

Appendix A-  PAGE  2  

Appendix A-  PAGE  2 

Appendix B-  PAGE  2 

Appendix B-  PAGE  2  

Appendix B-  PAGE  2 

Appendix C-  PAGE  12 

Appendix C-  PAGE  12  

Appendix D-  PAGE  6 

Appendix D-  PAGE  1  

Appendix E-  PAGE  14 

Appendix E-  PAGE  8  

Page   PAGE  2 

Appendix F-  PAGE  1  

Appendix F-  PAGE  6 

Appendix F-  PAGE  7  

Appendix G-  PAGE  2 

Appendix G-  PAGE  3  

Page   PAGE  2 

Appendix H-  PAGE  3  

Appendix H-  PAGE  26 

Appendix H-  PAGE  13  

Appendix H-  PAGE  4  

Appendix I-  PAGE  4 

Appendix J-   PAGE  2 

Appendix J-   PAGE  2  

	

		Revenue Estimates of 

July 12, 2007		Community Water Systems

  PAGE  1 

		Revenue Estimates of 

July 12, 2007		Community Water Systems

  PAGE  3 

		Revenue Estimates of 

July 12, 2007	Community Water Systems

		Revenue Estimates of 

July 12, 2007		Community Water Systems

  PAGE  5 

		Revenue Estimates of 

July 12, 2007		Community Water Systems

		Revenue Estimates of 

July 12, 2007		Community Water Systems

		Revenue Estimates of 

July 12, 2007		Community Water Systems

		Community Water Systems

Economic and Supporting Analyses:

Short-Term Regulatory Changes to the               

Lead and Copper Rule