Drinking Water State Revolving Fund
Loans and Grants

 

Pre-Construction Loans

Pre-construction loans are available for rate-based public water systems having a public health risk priority component. A project sponsor must qualify as a small community unless the project priority is based, in part, on consolidation or regionalization. Pre-construction loans for the planning, engineering, and administrative allowances provide rate-based community water systems funds to complete the planning and engineering work necessary to proceed with project construction. Pre-construction loans are limited by a maximum project cost of $2 million.

Construction Loans

Construction loans, available to virtually all public water systems regardless of size, provide moneys for construction after planning and design are complete. Disbursements are made to the entity after costs are incurred. Disbursements during construction are generally on a monthly basis.

While the nature of a project will determine specific requirements, to qualify for funding the project sponsor must:

• Submit a plan that is cost-effective, environmentally and financially sound, and consistent with local comprehensive plans.
• Provide for public participation in the planning process.
• Establish how the loan will be repaid.
• Acquire the necessary project sites.
• Design facilities consistent with the planning recommendations.
• Obtain the necessary permit(s) to enable construction.
• Complete a value engineering report for projects valued at more than $5,000,000.

Pre-Construction Grants

Pre-construction grants are available to economically disadvantaged communities. A project sponsor must qualify as a financially disadvantaged community and must qualify as a small community. Grants are also limited to rate based community water systems. A project includes the planning, engineering, and administrative activities necessary to qualify for funding of a construction project. Pre-construction grants at 85% of allowances are provided, as long as the median household income in the community is less than the statewide average and the community has a associated public health risk component associated with the project. Pre-construction grants are limited by a maximum project cost of $2 million.

Construction Grants

Construction grants are available to project sponsors that qualify as financially disadvantaged communities. Grants shall be awarded only for projects to which a public health risk component is assigned. Additionally, projects must meet the user charge (or equivalent) financial burden, benefit limitation, and priority criteria as defined in the drinking water rule.

Grant funding for qualifying project sponsors is limited to 65% or 85% of the estimated post-allowance costs for the public health component. Construction grants are limited to 25% of available funds or $750,000 in any single year, whichever is less. Projects qualifying for grants in excess of the amount available from the Department in a single fiscal year shall be segmented for deferred funding in subsequent years. The minimum segmented grant amount available in any one year shall be the lesser of the estimated adjusted post-allowance project costs or $375,000 subject to the 25% limitation referenced above. 

Grant Qualifications

To qualify for a grant the project sponsor must:

• Submit a plan that is cost-effective, environmentally and financially sound, and consistent with local comprehensive plans.
• Provide for public participation in the planning process.
• Acquire the necessary project sites.
• Design facilities consistent with the planning recommendations.
• Obtain the necessary permit(s) to enable construction.
• Complete a value engineering report for projects valued at more then $5,000,000.