EPA Reports on Clean Water SRF Program

The federal government and the states have invested almost $53 billion in the Clean Water State Revolving Fund (CWSRF) program to rebuild and refurbish the nation’s wastewater infrastructure over the last 18 years, according to a recent report from the Environmental Protection agency.

The data was contained in the 2005 annual report on the CWSRF. The agency noted that the CWSRF is the largest federal funding program for wastewater infrastructure projects, such as treatment plants and collection systems, and has made almost 17,000 loans since the program’s inception in 1988.

“This report demonstrates the power of partnerships to leverage, innovate, and excel to meet wastewater infrastructure, watershed protection, and community health needs,” said Assistant EPA Administrator for Water Benjamin Grumbles.

At about the same time as the report’s release, Congress was debating a proposed cut in the Clean Water SRF funding. In early April, a Senate Appropriations subcommittee that oversees EPA’s budget held a hearing on the agency’s FY07 budget request. Democrats were highly critical of the Administration’s funding request for the CWSRF.

Senator Byron Dorgan (D-ND) said the Administration’s proposed cut to the CWSRF will only increase the gap between local needs for such water infrastructure and available federal funding. EPA Administrator Steven Johnson defended the proposed $200 million cut by explaining that it fulfills the administration’s long-term goal of appropriating $6.8 billion in total for local water infrastructure projects between 2004 and 2011.

By 2011, the loan program is expected to become self-sustaining, essentially providing $3.4 billion each year for local projects without any additional federal appropriation, according to EPA.

In 2005, the CWSRF helped fund $4.9 billion in high priority projects. That figure includes annual EPA contributions matched with at least an additional 20% from the states. The states, in turn, make low-interest loans to local utilities. The interest income and repayments derived from the loans help fund future projects. Many states also issue bonds, which added $940 million to the fund last year.

Annual CWSRF assistance has averaged about $4.5 billion. Borrowers save an average of 21% on financing costs over the life of the loan, according to EPA.

The CWSRF funds a broad range of projects − from wastewater systems and nonpoint source pollution control to estuary management and a range of projects focusing on water quality. It is considered one of the most cost-effective programs in government. For every dollar the federal government invests, more than two dollars is made available for environmental improvements.

EPA said last year states began submitting information to track environmental benefits and more than 60% of funding has been found to benefit drinking water, preserve fish habitat, and provide for water recreation.

2005 also was the first year that EPA recognized state CWSRF programs with PISCES Awards (Performance and Innovation in the SRF Creating Environmental Success) for program innovations that advanced EPA goals of performance and water quality protection through the use of the CWSRF. This year, 10 states, one from each region, received awards for their outstanding achievements.

For example, Maine refinanced $36 million in loans and leveraged the money that was freed up, resulting in over $20 million of additional available funding. In Florida, the Department of Environmental Protection funded 83 projects totaling over $260 million for water reuse projects.

As the CWSRF program has matured, a significant number of state programs have become interested in evaluating their approaches to conducting outreach to potential CWSRF borrowers. In 2005, EPA began working with several states to enhance their outreach techniques.

The report is online at: http://www.epa.gov/owm/cwfinance/cwsrf/annreport2005.htm.