EPA Report Examines Clean Water SRF Funding

The Environmental Protection Agency invested more than $900 million in 2006 to help states and municipalities update their wastewater infrastructure.

May 1st, 2007

The Environmental Protection Agency invested more than $900 million in 2006 to help states and municipalities update their wastewater infrastructure. Combined with state contributions, total financial assistance for wastewater projects topped $5 billion for the first time according to the EPA’s annual report on the Clean Water SRF.

Since the CWSRF program began 20 years ago, more than 18,000 loans totaling more than $57 billion have been provided to help rebuild and refurbish the nation’s wastewater infrastructure.

“The State Clean Water Funds are revolving and evolving to reach new levels of success and sustainability. EPA’s national report underscores the importance of innovation and partnership to increase environmental results in watersheds and communities across America,” said Benjamin H. Grumbles, EPA assistant administrator for water.

EPA said it placed a greater emphasis on community outreach programs last year. Those programs stimulate participation and encourage new approaches to providing information about the SRF. Although participation is voluntary, all 50 states and Puerto Rico are now tracking the link between project assistance and environmental benefits. The low-interest loans help communities restore and protect aquatic life, recreational uses and drinking water sources.

The CWSRF is the largest federal funding program for wastewater infrastructure projects, such as treatment plants and collection systems. It is an outgrowth of 1987 amendments to the Clean Water Act. The fund is self-sustaining in that the interest derived from loans as they are repaid helps expand the program to provide even broader funding in future years.

The CWSRF includes annual EPA contributions matched with at least an additional 20 percent 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 $1.82 billion to the fund last year. Annual CWSRF assistance has averaged nearly $5 billion. Borrowers save an average of 20 percent on financing costs over the life of the loan.

A copy of the annual CWSRF report can be found here: http://www.epa.gov/owm/cwfinance/cwsrf/ annreport2006.htm.

EPA Inspector General Questions SRF Bond Payments

EPA’s inspector general has found that some states are floating bonds to meet the local match for the Clean Water State Revolving Loan fund (CWSRF), and then using CWSRF monies to pay off the bonds. This practice is resulting in fewer dollars being available for water projects, and could hurt the long-term viability of the revolving loan program, according to a recent report.

The Office of Inspector General report said 20 states have used the Clean Water SRF to repay bonds issued to meet the required fund match, and 16 of those states also did so for the Drinking Water SRF. Many states have issued bonds as general obligations of the state that could potentially be transferred to the SRFs, which could also significantly decrease the amount of funds available for future projects.

Also, according to the report, four states used short-term bonds for their state match and then retired those bonds using SRF funds within a week of issuing them.

“We acknowledge that states have funding limitations and depend on legislatures for funding. Nonetheless, the majority of states have been able to finance their 20-percent match without using bonds financed by the SRFs, and we believe this is a goal toward which all states should strive,” the OIG stated.

When Congress created the Clean Water and Drinking Water SRF programs, it intended that they would be ongoing sources of funding for water projects. The funds were to be used to allow communities to leverage and maximize resources. The expectation was that the funds would continue to grow into perpetuity.

“Current practices have resulted in an estimated $937 million less available for loans since the inception of the SRF programs. This results in fewer projects being started and completed, resulting in more systems having public health concerns,” the OIG stated.

The Inspector General’s office recommended that EPA’s Office of Water revise its regulations and policy on state match options to no longer allow states to use bonds repaid from the SRF to meet state match requirements.

A copy of the full report can be found here: http://www.epa.gov/oig/reports/ 2007/20070329-2007-P-00012.pdf.

EPA, USDA Study Impact of Winter Manure Spreading

EPA and the U.S. Department of Agriculture have started a new study about the impact on streams, rivers and lakes from the agricultural practice of winter manure spreading.

Some farmers prefer to spread manure on their fields in the winter to avoid the cost of storage and because frozen soil can handle the weight of manure spreading equipment. However, freeze and thaw cycles create a risk of polluted runoff when manure is applied in the winter.

“The purpose of the study is to improve the science used to make decisions about the safety of winter manure spreading,” said EPA Regional Water Division Director Jo-Lynn Traub. “The agencies are trying to balance environmental protection with the needs of farmers.”

The study is being conducted at several small experimental watersheds at a USDA research facility near Coshocton, Ohio. The study started in February and the agencies expect to publish results next year. It is a joint study by EPA Region 5, EPA Office of Research and Development and USDA Agricultural Research Service.

More information about the study is available on EPA’s Web site at http://www.epa.gov/region5/agriculture.

EPA Sets Nitrogen Limits for Blue Plains Facility

The U.S. Environmental Protection Agency has set new limits on the amount of nitrogen that can be legally discharged by the Blue Plains wastewater treatment plant to help improve water quality in District of Columbia waters and the Chesapeake Bay.

The nitrogen reduction from 8.5 million pounds per year to 4.7 million pounds per year is part of a modification to the facility’s operating permit, EPA said. To meet the new limits, the D.C. Water and Sewer Authority, which owns the plant, will need to upgrade the facility under a timeline outlined in a forthcoming consent agreement with EPA.

“This action is part of EPA’s Chesapeake Bay initiative to reduce the amount of nitrogen, phosphorous and sediments entering the bay,” said Donald S. Welsh, regional administrator for EPA’s mid-Atlantic region. “Meeting these reductions will be key in our efforts to help restore the Chesapeake Bay and the waterways in and around our nation’s capital.”

As the world’s largest advanced wastewater treatment facility, Blue Plains serves the District of Columbia, Montgomery and Prince Georges counties in Maryland and Fairfax and Loudoun counties in Virginia. The facility covers 150 acres and has a design capacity to treat 370 million gallons of effluent per day. Its collection system includes about 1,800 miles of sanitary and combined sewers.

A copy of the permit and a fact sheet is available online at: http://www.epa.gov/reg3wapd/npdes/blueplains.htm.

More in Environmental
Potable Water Quality
EPA releases draft guidance on PFOA, PFOS