DWSRF Program Overview
The Drinking Water State Revolving Fund (DWSRF) program provides low cost loan financing to municipal and privately owned public water systems for capital improvements that improve public health protection and facilitate compliance with the Safe Drinking Water Act. The DWSRF has three separate, but often related, funding opportunities:
- First, the DWSRF Planning loan program provides 0% interest, 5-year term loans to public water systems seeking to conduct preliminary and final design engineering. This preliminary engineering can run the gamut from source exploration to feasibility studies for water system acquisition to preliminary and final design of a construction project. One of the most attractive aspects of the planning loan program is the opportunity for municipally-owned systems to obtain principal loan forgiveness, based on system population, projected user rate, eligible project costs and funding source.
- Second, the Source Protection Loans can be used to purchase land or conservation easements to protect public water sources and ensure compliance with state and federal drinking water standards. Source(s) must have a hydrogeologically-delineated source protection area, an approved Source Protection Plan prior to loan award and are limited to public community water systems (PCWS). The water system must demonstrate how the project will directly promote public health protection or compliance with national drinking water regulations.
- Third, the Construction Loan Program provides funding for a variety of water system improvements, for public community water system and non-profit non-community water system (both NTNC and TNC). Construction loans are awarded through an annual priority ranking system, with the strongest emphasis on projects that address the most significant health problems and facilitate compliance with the Safe Drinking Water Act. Loan rates vary from 3% to negative 3%. Loan terms also vary up to 30-years.
The Construction loan program is funded through an U.S. Environmental Protection Agency (USEPA) capitalization grant and a State match appropriated annually through the Capital Bill. The DWSRF, on an annual basis, develops an Intended Use Plan (IUP) which outlines how the program intends to spend the money, both to support special water system projects and staffing, and infrastructure improvement projects. The IUP is receives public input at an annual public hearing and is approved by the EPA. One of the primary components of the IUP is the state-wide construction priority list; water systems must apply annually for placement on the list. An important expenditure proposed in the IUP is money for the Planning Loan Program.