Stimulus Package To Hit Sewer/Water Fast

Significant Leeway From Usual Restrictions Make Monies More Accessible
By Stephen Barlas, Washington Editor | March 2009 Vol. 64 No. 3
Water projects should increase with the latest federal stimulus package.

The economic stimulus package passed by Congress and signed by President Obama on Feb. 17 will unleash a national flood of wastewater and drinking water construction funds with the $4 billion and $2 billion emergency appropriations for the federal Clean Water and Drinking Water State Revolving Funds (SRFs).

There is also $1.38 billion for the U.S. Department of Agriculture’s rural development loan and grant programs for small town water utility construction.

These one time EPA and USDA water infrastructure infusions are supposed to serve two objectives: putting laid off construction workers back in hardhats and refurbishing sewer and drinking water systems which in many places give new meaning to the word “dilapidated.”

The EPA stimulus funds will be dispersed very quickly to the states using the standard SRF formula. The $4 billion emergency CWSRF appropriation will equal four to five times what states would get in a recent year; the same scenario applies to the DWSRF. As a television huckster might say: “But wait, there is more.” Not only will there be a deluge of emergency funds cascading into states, that money can be used much more freely than the annual SRF funds, which the state gives out in the form of low interest loans, which have to be matched 20 percent by the locality.

20 percent match flexibility (subhed)

For these stimulus funds, the 20 percent match has been eliminated. Also, Congress has mandated that states use at least 50 percent of its portion of the emergency CWSRF and DWSRF funds “to provide assistance for additional subsidization in the form of forgiveness of principal, negative interest loans, or grants, or any combination of these.” In the conference report on the 1,000 plus page stimulus bill, called the American Recovery and Reinvestment Act (H.R. 1), states are instructed “to reach communities that would otherwise not have the resources to repay a loan with interest” and “to ensure expedited award of grants under the additional subsidy provisions.”

At least 20 percent of a state’s stimulus sewer and drinking water funding must go to projects to address green infrastructure, water and/or energy efficiency, innovative water quality improvements, decentralized wastewater treatment, stormwater runoff mitigation and water conservation. If there aren’t enough applications in those categories, however, a state can ignore the “20 percent green” requirement.

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