Well yeah, execution has to happen locally. But you did open this with a "Do you think water systems are managed at the federal level? They're not.". And I'm not sure why you think that because you seem to be describing a situation where the EPA, at the federal level, is in fact managing water systems. Obviously we have a terminology disagreement here somewhere.
I mean, if there was a software engineer designing systems, working with vendors, setting his own standards that were higher than company standards, collecting monitoring data, managing permissions, yada yada, we would still have to acknowledge that he was not the manager in the region, he is an employee and the manager is someone else. He is managing some aspects of the situation, no doubt, but if we ask "who is managing all this" the conventional answer isn't the developer, but the developer's manager. "Management" is typically reserved for the senior managers in the area monitoring the outcomes and setting high-level standards. By analogy, the EPA is attempting to manage water systems at the Federal level.
Do parts of that chain of logic seem questionable to you? Is it possible that when you say "managed" you mean what I would call "executed"?
> I don't understand why you think an agency nationally coordinating all the local governments' efforts and making reports to Congress should exist at any level below the federal.
I recommend asking questions if you don't understand something. It works well for me. This (drinking water) is a critical system. Centralised management is too risky, if something goes off the rails then it'd affect drinking water across an entire country. It is better to have disparate systems where failure is more localised.
Right now, the headline suggests <10% of the US is at risk. Trading that for a situation where there is a <10% chance that all of the US is at risk is actually making the risk profile worse. The chance of a problem is the same because nothing has been done to lower the triggers, but the consequences are substantially worse because the system is trying to centralise under the EPA. The EPA shouldn't be in a position where local authorities feel they have to sue them to keep the system decentralised, they shouldn't be trying to manage local operations.