DRINKING WATER STATE REVOLVING FUND
Eligible applicants to the Drinking Water State Revolving Fund (DWSRF) Program are state agencies, counties, municipalities, joint powers boards, and other entities constituting a political subdivision under the laws of the state (such as water/improvement districts).
Eligible projects include most drinking water source, treatment, transmission, storage, and distribution projects for a public water system or that create a new public water system.
The project must also be ranked on the current DWSRF Intended Use Plan (IUP). Please contact the SRF Program if your proposed project is not ranked. The DWSRF IUP is updated once annually in the spring. The priority ranking system is based on public health issues, compliance issues, system deficiencies, and affordability criteria.
The source of the security for loan repayment can come from a variety of different revenue sources. Some common examples are capital facilities taxes, ad valorem property taxes, 1% sales tax, municipal bond elections, capital improvement or debt service reserve accounts, water user fees, and tap fees. A loan can only be approved if the Office of State Lands and Investments determines that the applicant can satisfactorily repay the loan.
The loan term can be up to 20 years, and the interest rate is normally 2.5 percent. A 0.5 percent origination fee is collected at loan closing. Loan repayment must begin within one year after the substantial completion date of the project. At times, some SRF loans may be at even lower interest rates and/or include forgiveness of a portion of the principal, when congressional appropriation bills contain special requirements.
Loan applicants must complete and submit 3 copies of the DWSRF loan application forms to the Office of State Lands and Investments.
Loan applicants need to be aware of the timing of the application process. The loan applicant needs to begin the SRF loan application process at least 6 to 12 months prior to bidding out the project. Final loan approval is by the State Loan and Investment Board (SLIB). SLIB meetings are normally held every two months.
Loan applicants must adhere to federal environmental, social, and economic cross-cutting requirements and state procurement requirements. The required environmental review process typically takes about 3 to 4 months. The process may take significantly longer if onsite surveys or field inspections are required. The process concludes with a 30 day public comment period and must be complete before SLIB can approve the loan. Social and economic cross-cutting requirements include disadvantaged business enterprise, equal employment opportunity, debarment and suspension, anti-discrimination, Civil Rights Act, and others. Standard boilerplate language must be included in the construction contract documents to meet some of these requirements. The SRF program provides guidance documents for either 1st round fund boilerplate language or 2nd round boilerplate language for each project, depending on the funding details for each particular loan.
Loan applicants must also demonstrate capacity development before they can receive a loan.
Incurred project costs are reimbursed through loan draft requests submitted to the Office of State Lands and Investments. Project costs such as administration, planning and feasibility studies, and preliminary and final designs are reimbursable costs even if they are incurred prior to loan approval, but construction costs are reimbursable only if construction begins after completion of the environmental review.
Contacts are listed on the SRF home page.
Last Updated: January 23, 2012