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Compliance

Water Resources and Tools for Financing Compliance

According to the EPA GAP Analysis estimates, communities will face a spending gap of over $485 billion dollars between 2000-2019 to improve water and wastewater infrastructure. EPA’s Sustainable Infrastructure Initiative helps communities by offering a variety of strategies to make the best and most cost effective infrastructure decisions. These innovative approaches can help communities limit costs and achieve and sustain compliance.

Local governments are clearly concerned about how to pay for water and wastewater infrastructure. The United States Conference of Mayors’ Growth in Local Government Spending on Public Water and Wastewater Report found that local governments spent $111.4 billion for public water supply and wastewater management in 2010. The US Conference of Mayors estimates that investment needs over a 20 year horizon (2008-2028) is likely in the range of $2.8 to $4.8 trillion.  

Projects to improve water infrastructure require relatively large and consistent revenue sources and cities often use bonds, loans, and/or grants to raise the necessary capital. Smaller revenue mechanisms such as taxes, fees or rate increases are often sufficient to fund operation and maintenance programs.

It is often difficult to properly determine an adequate water rate. The 2014 American Water Works Association/Raftelis Financial Consultants Water and Wastewater Rate Survey Exit states that the average monthly water and wastewater rates for US customers1 (excluding Puerto Rico) are: 

Water Rate Survey Results
Population Served Average Consumption (gallons) Average Bill
All 7,359 $33.76
< 10,000 6,222 $49.96
10,001 to 90,000 7,784 $36.86
90,001 to 425,000 7,060 $30.31
> 425,000 7,572 $30.60
Wastewater Rate Survey Results
Population Served Average Consumption (gallons) Average Bill
All 6,357 $35.77
< 10,000 5,768 $42.15
10,001 to 90,000 5,525 $37.27
90,001 to 425,000 7,060 $35.10
> 425,000 5,865 $33.42
 

1273 water utilities and 184 wastewater utilities responded to the data request

To help communities plan to meet future compliance requirement, EPA maintains a searchable database containing information about new regulations, proposed rules, the Federal Register, dockets, and the regulatory agenda of future regulations to allow systems to better plan expansions and upgrades. The Office of Water maintains a web page containing information about current and proposed regulations, guidance, policies and other resources.

  • Case Studies

    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.

  • Contacts

    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: The following links exit the site Exit

    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.

    USDA Rural Utility Service Federal Contacts
    This site provides the names and telephone numbers of RUS national staff.

    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.

  • Financial Providers and Resources

    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 (LGEANExit
    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 – Clean Water Financing
    This page provides links to multiple financing programs.

    EPA Office of Water – Catalog of Federal Funding Sources for Watershed Protection
    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.

    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.

  • Technical Providers and Resources

    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 Exit
    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 Exit
    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.

    EPA Office of Water – Asset Management
    This page contains links to an asset management video, training workshops and collaborative partnership agreements.

    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.

  • Policy and Guidance

    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.

  • Publications

    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.

  • Small Communities

    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 Exit
    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 Exit
    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) Exit
    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) Exit
    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 Exit
    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.

  • Tribal

    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 – Wastewater in Tribal Communities
    This website details tribal financial assistance programs and initiatives, contacts, publications and success stories.

    EPA Office of Water – Tribal Public Water System & Underground Injection Control Programs
    This website includes information about federal regulation of public water systems in Indian country, including EPA direct implementation and tribal primacy.

    EPA Regional Tribal Water Program
    This web page provides water program and grant information for tribes located in the EPA Regions.

    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 Exit
    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 Exit
    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 Exit
    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.

    Multi-resource Links

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

    EPA Office of Water – Tribal Assistance Programs
    This page provides links to several federal programs that provide technical assistance and grants to Indian tribes and Alaska Native Villages.

    Contacts

    EPA Clean Water Act Indian Set Aside Grant Program Coordinators

    EPA Regional Indian Program Managers and Coordinators

    Bureau of Reclamation Commissioner's Office Contacts — Native American Affairs Office

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