by Ronald Reddout

Created on: March 29, 2009

Water Conservation Efforts in My State

In our State government, the Department of Environment and Conservation has a program that enables the local governments, which includes public utilities, to finance water conservation efforts. With the help of both our State Revolving Fund Loan Program (SRFLP) and the Division of Water Supply, low-interest loan funding is made available to Municipalities, Counties, Utility Districts, and Water Authorities within our State. The low-interest loan funding provided goes towards the upgrading and expanding of water treatment facilities, water pumping stations, and water transport lines.

Low-interest loans are based on several factors to include the Bond Buyer Index (BBI20), which gives the current market rate for Bonds on a weekly basis, and the Ability To Pay Index (ATPI), which is used to determine the percentage of the BBI20 for which a particular local government is eligible. Basically, the ATPI is based on the financial status of the local government and can range anywhere from 0% to 100%. Then the current BBI20 figure is multiplied by the ATPI for that local government and a low-interest rate is determined for that particular loan.

The Region IV Environmental Protection Agency (EPA) provides to our State, via funds received from the Federal Budget, an 80% Capitalization Grant for use in funding water-related conservation efforts in our State. Our State then provides a 20% funding match against the EPA Grant funding and this makes 100% of the total monies available for funding water conservation projects. In other words, if EPA provides Capitalization (Cap) Grant funding in the amount of $8,000,000, then our State must match that amount with $2,000,000 of State monies, which brings to $10,000,000 the total amount of monies available to fund water-related projects for that year. Of course, any monies available in the State's Water Revolving Fund (these funds represent repayments made on loans where the project has been completed and the loan placed in repayment status) can be added to this figure as well.

Water projects are submitted to the Division of Water Supply for ranking once each year. This happens after letters are sent out by the Financial Section of the SRFLP inviting Municipalities, Counties, Utility Districts, and Water Authorities to submit their projects for ranking. Since these are limited funds each year and the Act that made our Water Conservation program possible has only been around about 12 years now -

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