MINNEAPOLIS -- Breaking ranks with other state and local groups, the National League of Cities is urging Congress to avoid approving legislation to create a revolving loan fund for safe drinking water programs.

The policy position adopted by the league during its annual meeting here Sunday does not directly oppose the revolving fund concept, but criticizes it and says there are better methods, such as grants, for helping local governments finance compliance with the requirements of the Safe Drinking Water Act.

"New programs to assist municipalities in meeting federal requirements are only a marginally acceptable method of financial help for municipal compliance with these mandates," the policy position states. "NLC believes these funds could be more effectively used to benefit municipal water suppliers and local rate payers if they were retargeted to other purposes."

The league's chief lobbyist, Frank Shafroth, said the policy position "is not saying we would rather have nothing" than the revolving loan funds, which are designed for states to leverage federal loans by issuing tax-exempt bonds.

"It's just that we're not enthusiastic that the state revolving loan funds are the best way to go," said Carol Kocheisen, counsel to the league.

Last year the league passed a resolution stating its displeasure with the revolving loan idea, but under the league's rules the resolution was scheduled to expire this month. The position passed by the league Sunday is effective until members take action to repeal it.

The policy position lists what the league believes are six better uses for the federal money than serving as seed money for the drinking water loan funds:

* Aiding administration of existing state drinking water programs.

* Financing "research on contaminant health effects and risk reduction benefits".

* Helping "develop new and more cost-effective water purification technologies".

* Funding programs to train and certify operators of public water-supply systems.

* Funding programs that would assist small communities with mandated monitoring and other compliance requirements.

* Funding "direct construction grants to small cities for drinking water filtration and purification plants where deemed necessary to meet federal drinking water standards."

Earlier this year House and Senate committees approved different versions of legislation to create drinking water revolving loan funds as part of a larger bill to reauthorize the Safe Drinking Water Act, but neither chamber acted on the measures.

Prospects for the legislation next year in the Republican-led Congress are uncertain, lobbyists have said. Although they said they expect Republicans will understand the need to help local governments fund drinking water programs, the issue may take a backseat to other pressing bills the Republicans are intent on passing, such as a middle-income tax cut proposal.

This year's drinking water legislation was supported by a number of associations representing state and local interests, including the Council of Infrastructure Financing Authorities, National Governors Association, and Association of Metropolitan Water Agencies.

Also on Sunday the league elected new officers for a one-year term: president, Carolyn Long Banks, a councilwoman in Atlanta; first vice president, Hal Conklin, the mayor of Santa Barbara, Calif.; and second vice president, Ruth Messinger, the borough president of Manhattan.

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