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Interpretation of Necessary Investments and Water and Sewer Infrastructure <br />Necessary Investments: As discussed above, Treasury considers an investment in <br />infrastructure to be necessary if it is (1) responsive to an identified need to achieve or maintain <br />an adequate minimum level of service, which for some eligible project categories may include a <br />reasonable projection of increased need, whether due to population growth or otherwise and (2) a <br />cost-effective means for meeting that need, taking into account available alternatives. In <br />addition, in the case of investments in drinking water service infrastructure to supply drinking <br />water to satisfy a projected increase in population, the project must also be projected to be <br />sustainable over its estimated useful life. As detailed further below, DWSRF and CWSRF <br />eligible projects continue to be presumed to be necessary investments under the final rule, with <br />the exception of projects for the rehabilitation of dams and reservoirs, which the EPA has <br />permitted in certain circumstances under the DWSRF and, as discussed below, are addressed <br />separately in the final rule. <br />In evaluating whether a project would respond to a need to achieve or maintain an <br />adequate minimum level of service, a recipient should consider whether it would meet the needs <br />of the population to be served and would satisfy applicable standards. For example, a drinking <br />water project must be sized such that it provides an adequate volume of water to households and <br />other customers and must meet applicable standards for drinking water quality under the Safe <br />Drinking Water Act (SDWA). Similarly, a centralized wastewater treatment project should be <br />designed to manage updated estimated flow rates and comply with Clean Water Act <br />requirements. These requirements are already reflected in the eligibility criteria of the DWSRF <br />and CWSRF, respectively. <br />266 <br />