Water Resources and Tools for Financing Compliance

Read short case studies of how other cities and tribes financed water and wastewater infrastructure.

City of Los Angeles - 2005

This is an example of a large system using bonds and rate increases to fund sewer infrastructure.

The City of Los Angeles (City) provides wastewater service to over four million people in the City and 29 contract agencies. The system covers 600 square miles and is comprised of more than 6,500 miles of sewers and four wastewater treatment and water reclamation plants that process over 550 million gallons of flow each day.

In October 2004, the City reached a landmark 10-year settlement agreement (settlement) with the United States EPA (US EPA), the State of California, the Santa Monica Baykeeper and a number of community groups in South Los Angeles. As part of the agreement, the City committed to a systematic inspection, maintenance and upgrade of the sewer system with the goal of reducing sanitary sewer overflows. The 10-year estimated sewer system investment was estimated at $2.3 Billion with $2 Billion previously planned and budgeted.

The increase in expenditures is being financed by increases in sewer rates combined with financing and increased operational efficiencies. The settlement agreement was followed by unanimous approval of a 5-year sewer rate increase of 7% annually to help fund the sewer improvement program.

Over 75 community meetings followed the settlement in an effort to communicate the rate increase to the community. Demonstrating the need to renew the aging infrastructure and to reduce sewer overflows, the community supported the rate increase. The average monthly household sewer rate will increase from ~$21 in 2005 to ~$30 in 2009 The increased sewer rates will increase the projected annual revenue by $129 million from $399 million in 2005 to $528 million in 2009. With the manageable settlement terms and the 5-year rate increase, the City maintained its Fitch and Standard and Poor’s wastewater bond ratings of AA- and received a Moody’s upgrade from an A1 to Aa3. As a result, the City will be able to issue additional debt at a lower cost. Results are already showing where overall spills have been reduced by ~50% and grease related spills have been reduced by ~80%.

Waverly, New York

This is an example of small system using SRF loans and non-EPA grants to fund sewer infrastructure.

The city serves ~4,600 customers and needed to build a $2.7 million wastewater treatment plant and make improvements to the collection sewer system to comply with the requirements of the Clean Water Act. The city qualified for a $900,000 SRF interest-free loan and received commitments from the federal Rural Utilities Service for a $1.3 million grant and $50,000 loan, and from HUD for a $400,000 grant. With these commitments, the town obtained a short-term, interest free, $2.7 million SRF loan, which will be paid off by long-term SRF, RUS and HUD financing.

Clean Water State Revolving Fund Contacts
Through the CWSRF program, each state and Puerto Rico maintain revolving loan funds to provide independent and permanent sources of low-cost financing for a wide range of water quality infrastructure projects. Funds to establish or capitalize the CWSRF programs are provided through federal government grants (federal funding levels (PDF) (6 pp, 142K, About PDF ) ) and state matching funds (equal to 20 percent of federal government grants). Today, all 50 states and Puerto Rico are operating successful CWSRF programs. Total funds available to the program since its inception exceed $55 billion.

Drinking Water State Revolving Fund Contacts
The Safe Drinking Water Act, as amended in 1996, established the Drinking Water State Revolving Fund to make funds available to drinking water systems to finance infrastructure improvements. The program also emphasizes providing funds to small and disadvantaged communities and to programs that encourage pollution prevention as a tool for ensuring safe drinking water.

EPA Sustainable Infrastructure Contacts
Utilities and other decision makers need to evaluate a broad array of traditional and other watershed-based tools as they make key water infrastructure decisions. EPA regional sustainable infrastructure contacts can help communities create an integrated watershed planning approach that helps reduce future infrastructure costs or, in certain cases, provides alternatives to traditional infrastructure approaches.

The Environmental Finance Centers
The EFCs provide state and local officials and small businesses with advisory services; education, publications, and training; technical assistance; and analyses on financing alternatives. The nine centers have helped numerous communities implement innovative environmental financing techniques.

The Environmental Finance Center Network currently includes:

• University of Southern Maine
• Syracuse University
• University of Maryland
• University of North Carolina at Chapel Hill
• University of Louisville
• Great Lakes EFC at Cleveland State University
• Wichita State University

These centers have proven effective vehicles for promoting innovative environmental financing techniques.

Other Government Contacts

USDA Rural Utility Service State Contacts
The Rural Utility Service (RUS) provides loans, grants and loan guarantees for drinking water, sanitary sewer, solid waste and storm drainage facilities in rural areas and cities and towns of 10,000 or less. Public bodies, non-profit organizations and recognized Indian tribes may qualify for assistance. RUS also makes grants to nonprofit organizations to provide technical assistance and training to assist rural communities with their water, wastewater, and solid waste problems.

Department of Commerce — Economic Development Administration Contacts
This site provides a list of EDA regional contacts. These contacts can provide information on EDA programs, investment policies, and funding opportunities.

Housing and Urban Development Community Development Block Grant Contacts
This site provides field office contact information. The field office staff can provide eligibility information for the community development block grant program.

EPA and other entities have published numerous documents and tools to assist municipal officials as they develop a financing plan. Below are selected sites containing financing information. This is not an exhaustive listing of available financial information providers and resources but rather highlights some resources from the vast array of available tools. 

Providers

EPA Office of Water – Clean Water State Revolving Fund
This loan program provides funding for the construction of municipal wastewater facilities and implementation of nonpoint source pollution control and estuary protection projects.

EPA Office of Water – Drinking Water State Revolving Fund
This loan program provides funds for drinking water systems to finance drinking water infrastructure improvements. Emphasis is placed on funds to small and disadvantaged communities and to programs that encourage pollution prevention.

Water Infrastructure and Resiliency Finance Center
The Water Finance Center is an information and assistance center, helping communities make informed decisions for drinking water, wastewater, and stormwater infrastructure to protect human health and the environment.

The Local Government Environmental Assistance Network (LGEAN) 
This site is a "first-stop shop" providing environmental management, planning, funding and regulatory information for local government elected and appointed officials, managers and staff. LGEAN enables local officials to interact with their peers and others online. In an effort to reach all local governments, LGEAN also manages a toll-free telephone service (877/865-4326).

EPA Office of Compliance Assistance Centers
This site contains links to various centers available to answer questions about environmental regulations based on industry type.

USDA Rural Utility Service
This program provides funding for technical assistance and training for water and waste disposal facilities Funds may be used to identify and evaluate solutions to water and/or sewer problems of associations in rural areas relating to source, storage, treatment, distribution, collection, and disposal.

Department of Commerce Economic Development Agency
The Public Works Program empowers distressed communities to revitalize, expand, and upgrade their physical infrastructure to attract new industry, encourage business expansion, diversify local economies, and generate or retain long-term, private sector jobs and investment.

Resources

EPA Office of Water – Water Finance Clearinghouse
The Catalog of Federal Funding Sources for Watershed Protection Web site is a searchable database of financial assistance sources (grants, loans, cost-sharing) available to fund a variety of watershed protection projects. This source provides an EXTENSIVE list of federal funding resources.

EPA Office of Water – Watershed Funding
Committed watershed organizations and state and local governments need adequate resources to achieve the goals of the Clean Water Act and improve our nation's water quality. To support these efforts, the U.S. Environmental Protection Agency (EPA) has created this Web site to provide tools, databases, and information about sources of funding to practitioners and funders that serve to protect watersheds

USDA Water Funding Web site
This Web site provides links to water funding programs at various Agencies and Departments.

EPA and other entities have developed numerous documents and tools to assist municipal officials as they devise a technical solution. Below are selected sites containing technical assistance providers and resources. 

Providers

USDA Rural Utility Service 
This program provides funding for technical assistance and training for water and waste disposal facilities Funds may be used to identify and evaluate solutions to water and/or sewer problems of associations in rural areas relating to source, storage, treatment, distribution, collection and disposal.

National Rural Water Association 
The National Rural Water Association is a non-profit federation of State Rural Water Associations. This Association provides support services to State Associations who have more than 24,550 water and wastewater systems as members. Each state association provides training programs and on-site assistance in areas of operation, maintenance, finance, and governance.

The National Rural Water Association helps rural and small water & wastewater systems by providing formal and classroom training with follow-up, on-site technical assistance to member and nonmember systems.

Resources

EPA Office of Water – Municipal Technology Fact Sheets
This EPA Web site provides fact sheets on CSO treatment, storm water, disinfection, biological treatment, water efficiency, decentralized water treatment, collection system O&M, biosolids technology, wastewater technology, and energy conservation and management.

EPA’s Drinking Water Academy
The Academy provides classroom and web-based training materials to help systems implement and comply with the Safe Drinking Act regulations.

Sustainable Infrastructure for Water and Wastewater
This page provides information on better management of water and wastewater utilities, full cost pricing, efficient water use and watershed approaches to environmental protection.

United State Census Bureau
This site contains population and economic data on communities across the nation

United States Bureau of Labor Statistics
This site contains economic and statistics data on social and economic conditions across the country.

EPA has created guidance documents to assist municipal officials as they develop a financing plan to remain in or return to compliance. Below are selected links to EPA water policy and guidance documents.

Combined Sewer Overflows: Guidance for Funding Options August 1995 (PDF) (64 pp, 2.9MB, About PDF)
This document describes a broad spectrum of options that may be available to fund the capital, debt service, and operational costs of CSO controls. The benefits and limitations of the various options are presented to aid in evaluating the applicability of each option.

Interim Economic Guidance Workbook (1995)
This guidance is for use by states and EPA regional offices in considering economics at various points in the process of setting or revising water quality standards.

EPA Civil Penalty Policies
This link contains EPA's Civil Penalty Policies relating to violations or non-compliance with the environmental statutes and regulations. The listing is not inclusive of all policy and guidance document that may also be relied upon in developing enforcement actions.

The Office of Water
This Web page contains links to water guidance and policy documents.

EPA has published multiple resources to assist municipal officials as they develop a financing plan to remain in or return to compliance. Below are selected links to EPA water publications.

EPA Guidebook of Financial Tools
This document contains 340 tools for governments and the private sector to use to pay for environmental programs, systems and activities. Sections include traditional means of raising revenue, borrowing capital, enhancing credit, creating public-private partnerships, and ways of providing technical assistance, ways of lowering the costs of compliance, encouraging pollution prevention, paying for community-based environmental protection, financing brownfields redevelopment, and improving access to capital for small businesses and the environmental goods and services industry. Each tool is described along with its actual and potential uses, advantages and limitations, and references for further information.

Handbook on Coordinating Funding For Water and Wastewater Infrastructure - A compilation of state approaches (2003)
This handbook is intended to be a working tool for states on approaches to coordinating federal, state, and local funding for drinking water and wastewater infrastructure

Municipal Technology Fact Sheets
EPA maintains a list of available water technologies and has created fact sheets on each technology to help potential customers better understand the utility of each technology. Use of these technologies may result in cost savings.

The following is a non-exhaustive list of free technical assistance and financial resources targeted toward small communities. The small communities contacts lists specific water program contacts.

Below are selected sites containing technical assistance and financial resource information specifically designed to assist small communities. This is not an exhaustive listing of available resources but rather highlights some resources from the vast array of available tools.

Technical Assistance Resources

EPA classifies drinking water systems serving fewer than 3,300 and wastewater systems serving less than 10,000 as small communities. The following is a non-exhaustive list of EPA and non-EPA technical assistance resources targeted at small water and wastewater systems.

EPA’s Drinking Water Academy
The Academy provides classroom and web-based training materials to help systems implement and comply with the Safe Drinking Act regulations.

EPA Office of Water – Management of Onsite/Decentralized Systems
This program provides voluntary national management guidelines and other information to regulators, community and business leaders, and citizens in small communities served by a variety of onsite wastewater technologies, including septic systems.

EPA’s Office of Ground Water & Drinking Water – Small Systems and Capacity Development
This Web site contains a wealth of information pertaining to small drinking water systems including technical, financial and managerial capacity development resources.

EPA Office of Water – Operator On-Site Technical Assistance Program [CWA §104(g)]
This program provides hands-on assistance to small municipal wastewater treatment plant operators to address compliance assistance, maintenance, and performance improvement matters by providing operations and maintenance, financial, and technical assistance at no cost to the community.

National Drinking Water Clearinghouse 
The Clearinghouse is located at West Virginia University and helps small communities by collecting, developing, and providing timely information relevant to drinking water issues. It is intended for communities with fewer than 10,000 residents and the organizations who work with them. It offers training and free telephone consultation.

National Environmental Services Center 
This Center provides technical assistance and information about drinking water, wastewater, environmental training, and solid waste management to communities serving fewer than 10,000 individuals.

National Environmental Training Center for Small Communities (NETCSC) 
The Center develops and delivers training courses on wastewater, drinking water and solid waste to environmental trainers and state and local officials. Services include a toll-free technical assistance hotline, a Web site, computer databases, newsletters, and other activities.

National Small Flows Clearinghouse (NSFC) 
The Clearinghouse collects and distributes information about small wastewater treatment solutions. Services include a toll-free technical assistance hotline, an internet-based discussion group, computer databases, newsletters, and other publications.

Rural Community Assistance Partnership 
This network of nonprofit organizations provides community-specific information and technical assistance at no cost. The goal of this program is to improve the ability or rural communities to plan, design, operate, and maintain wastewater systems.

Financial Resources

EPA classifies drinking water systems serving fewer than 3,300 and wastewater systems serving less than 10,000 as small communities. The following is a non-exhaustive list of EPA and non-EPA technical assistance resources targeted at small water and wastewater systems.

Grants

USDA Water and Waste Disposal Loan and Grant Program
This program provides funding for clean and reliable drinking water systems, sanitary sewage disposal, sanitary solid waste disposal, and storm water drainage to households and businesses in eligible Rural areas and towns with fewer than 10,000 people, tribal lands in rural areas and colonias.

Loans

EPA Office of Water – Clean Water State Revolving Loan Program
All 50 states and Puerto Rico operate loan programs that provide low-interest financing for wastewater and other water quality projects. All of these programs provide assistance to small communities, and over half of the states have developed special programs for disadvantaged communities.

EPA Office of Water – Safe Drinking Water State Revolving Loan Program
This program makes funds available to drinking water systems to finance infrastructure improvements. The program also emphasizes providing funds to small and disadvantaged communities and to programs that encourage pollution prevention as a tool for ensuring safe drinking water. Loans made under the program can have interest rates between 0 percent and market rate and repayment terms of up to 20 years.

Multi-resource Links

EPA Office of Water – Federal Funding Sources for Small Community Wastewater Systems
This link provides information about programs through which small, under served communities can access information, financial resources and technical assistance to achieve adequate and cost effective wastewater systems. The publication contains 10 fact sheets of possible funding sources to help small, rural communities attain adequate wastewater systems. The fact sheets provide information on the types of help each program offers, what projects are funded, who is eligible, and how to reach the program contacts to apply for the funds.

EPA’s Office of Ground Water & Drinking Water – Small Systems and Capacity Development
This Web site contains a wealth of information pertaining to small drinking water systems including technical, financial and managerial capacity development resources.

Contacts

Small and Rural Wastewater Systems - Clean Water and Drinking Water
EPA provides information on management, funding, technology, and public outreach to help small communities maintain compliance with the Clean Water Act and Safe Drinking Water Act.

The following is a listing of technical assistance resources as well as financial resources available to tribes for financing water environmental compliance. The tribal contacts are available to answer specific water program questions.

Technical Assistance Resources

Indian tribes and Native Alaskan Villages face significant water and wastewater infrastructure challenges. EPA and other organizations provide technical assistance resources to help these communities protect public health and the environment. The following is a non-exhaustive list of free technical assistance resources targeted toward tribes.

Environmental Protection in Indian Country
This site coordinates the Agency-wide effort to strengthen public health and environmental protection in Indian Country, with a special emphasis on building Tribal capacity to administer their own environmental programs.

EPA Office of Water – Tribal Resource Directory for Drinking Water and Wastewater Treatment
The Directory is intended for use by Indian tribes and tribal environmental organizations to assist in identifying financial and technical assistance programs. It can also be explored by federal representatives as a reference document in answering questions on sources of funding and technical support for tribal drinking water and wastewater infrastructure.

EPA’s Office of Wastewater Management – Resources for Small and Rural Wastewater Systems
This website details tribal financial assistance programs and initiatives, contacts, publications and success stories.

Bureau of Reclamation Native American Affairs Technical Assistance Program
The Bureau of Reclamation's Native American Program provides technical assistance to Indian Tribes in the field of water resource development and management through direct participation, training, and partnering.

Bureau of Reclamation Native American Affairs Office and Program
The Native American Affairs Office in the Commissioner's Office serves as the central coordination point for the Native American Affairs Program and is Reclamation's policy lead for all Native American issues.

National Environmental Services Center 
The Center provides technical assistance and information about drinking water, wastewater, environmental training, and solid waste management to communities serving fewer than 10,000 individuals.

National Drinking Water Clearinghouse at West Virginia University 
The Clearinghouse helps small communities by collecting, developing, and providing timely information relevant to drinking water issues. It is intended for communities with fewer than 10,000 residents and the organizations who work with them. It offers training and free telephone consultation.

Native American Water Association 
The Association provides tribal water and wastewater operators, managers, administrators, utility commissions and Tribal Councils with continued training and technical assistance in their goals to: strengthen tribal sovereignty, self-determination and protect health and environment in Indian country.

Financial Resources

Indian tribes and Native Alaskan Villages face significant water and wastewater infrastructure challenges. EPA and other organizations provide financial resources to help communities protect public health and the environment. The following is a non-exhaustive list of financial resources targeted toward tribes.

Grants

Alaska Native Village and Rural Communities Grant Program
This program provides grants to Alaska Native villages for drinking water and wastewater facility construction, training and technical assistance.

EPA Office of Water – Clean Water Tribal Grant Program
This program provides grants to Indian tribes (including tribes on former reservations in Oklahoma) and Alaska Native villages for planning, design and construction of wastewater facilities.

EPA Tribal Grants links
This page provides information and links to multiple EPA tribal grant programs.

EPA Office of Water – US/Mexico Tribal Border Infrastructure Grant Program
This page provides information about the ~$27 million dollars which has been set aside by EPA Region 9 to address high priority drinking water and wastewater projects on tribal lands.

Contacts

EPA Tribal Program Managers

Bureau of Reclamation Offices Addresses and Contacts

Indian Health Service Area Regional Office — Office of Environmental Health and Engineering — Division of Sanitation Facilities Construction