PROTECTING PUBLIC HEALTH AND THE ENVIRONMENT
WHILE CREATING JOBS AND REVITALIZING THE ECONOMY
-------
"WE ARE MEETING AT A DEFINING MOMENT,
FOR OUR NATION. WE CONTINUE TO PULL
ECONOMIC DOWNTURN SINCE WORLD WAR
II. THE PRESIDENT'S RECOVERY ACT HAS CUT
TAXES FOR THE VAST MAJORITY OF MIDDLE
CLASS JA^ilLIES AND PROVIDED CRITICAL
RESOURCES TO LOCAL GOVERNMENTS SO
THEY CAN KEEP TEACHERS, FIRE FIGHTERS,
AND POLICE OFFICERS IN THEIR JOBS. IT
HAS HELPED EPA INVEST IN CRITICAL WATER
INFRASTRUCTURE PROJECTS, CLEAN DIESEL
RETROFITS, BROWNWELDS CLEANUPS, AND
MORE.THOSE INVESTMENTS DON'TJUSTCREATE
JOBS. THEY LEAVE OUR COMMUNITIES CLEAN
AND HEALTHIER - BETTER PLACES/TOBUY ~ft
HOME OR SET UP A BUSINESS. THAT IS EXACTLY
WHAT PRESIDENT OBAM^
i/vLKS ABOUT BUILDING A NEW FOUNDATIO,,
OR PROSPERITY, THHECONOMY is GROWING
CHWORK
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JsfD'GROWING FASTER.V
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ADMINI
-------
TABLE OF CONTENTS
THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009:
CREATING JOBS, REVITALIZING THE ECONOMY, AND INVESTING
IN A SUSTAINABLE FUTURE 4
THE SRF PROGRAMS DELIVER RESULTS 6
CLEAN WATER STATE REVOLVING FUND CASE STUDIES 11
DRINKING WATER STATE REVOLVING FUND CASE STUDIES 16
APPENDIX: COORDINATED IMPLEMENTATION OF ARRA 19
ARRA TIMELINE 21
ARRA STATISTICS AT A GLANCE . .22
NOTE: Data used throughout this report are from:
A. The Clean Water and Drinking Water SRF National Information Management Systems,
reported through June 30, 2010.
B. The Clean Water Benefits Reporting System and the Drinking Water SRF Project &
Benefits Reporting System. Data were downloaded on January 24, 2011.
CLEAN WATER AND DRINKING WATER STATE REVOLVING FUND PROGRAMS
-------
THE AMERICAN RECOVERY AND
REINVESTMENT ACT OF 2009
CREATING JOBS, REVITALIZING THE ECONOMY, AND
INVESTING IN A SUSTAINABLE FUTURE
In response to the recent economic recession,
Congress passed the American Recovery and
Reinvestment Act (Recovery Act or ARRA) of
2009, and President Obama signed it into law
on February 17, 2009. ARRA was intended to
preserve and create jobs, promote economic
growth, and invest in environmental protection
and infrastructure for long-term economic
productivity. To help achieve these goals, the
legislation appropriated $7.2 billion to programs
administered by EPA to protect and promote
green jobs and a healthier environment, $6
billion of which was funding for states to
finance high-priority infrastructure projects
needed to improve the provision of safe drinking
water and protect and restore our surface waters
for public health, recreation, and wildlife.
As provided in the Recovery Act, the Clean Wa-
ter State Revolving Fund (Clean Water SRF)
programs received $4 billion, and the Drinking
Water State Revolving Fund (Drinking Wa-
ter SRF) programs received $2 billion. These
significant appropriations were a response to
the large water and wastewater infrastructure
needs in this country and served as recogni-
tion of the effectiveness of the SRF programs
in delivering water and wastewater infrastruc-
ture. Indeed, clean water is a basic necessity for
economic growth and human health.
Since the enactment of ARRA, the SRF pro-
grams have worked hard to fund important
water and wastewater infrastructure projects
and shepherd those projects to completion.
EPA provided critical support and guidance
to states, and states adapted their programs
and streamlined the SRF implementation pro-
cess to get the ARRA money to communities
as soon as possible. Many state programs in-
creased the amount of money they normally
award to projects through the SRFs by more
than two-fold, and they did so in about half
the time it normally takes.
4
IMPLEMENTATION OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009
-------
The results of the Recovery Act are truly im-
pressive, as demonstrated by the rise in real
gross domestic product (GDP) and the cre-
ation or preservation of millions of jobs af-
ter only one year. The White House Council
of Economic Advisors estimates that ARRA
raised the national GDP by 2.7 percent and
increased employment by 2.7 to 3.7 million
compared to what these figures otherwise
would have been through the third quarter of
2010.1 The SRFs have played a vital role by
executing more than 3,200 assistance agree-
ments worth over $5.6 billion for clean water
and drinking water projects that will continue
to confer economic, environmental, and public
health benefits for years to come.
This report highlights the performance of
the SRFs in their implementation of ARRA.
It also features case studies that emphasize
the role of ARRA in funding wastewater
and drinking water infrastructure projects
that will contribute to long-term economic
productivity, environmental sustainability
and public health protection, many of which
would not have otherwise been funded.
FIGURE 1: ARRA APPROPRIATION OF MONEY TO THE CLEAN WATER AND DRINKING WATER
STATE REVOLVING FUNDS
Other Core
Infrastructure
Investment
$45.2 B
CWSRF Investment
$4B
DWSRF Investment
$2B
The Executive Office of the President of the United States, Council of Economic Advisors. November 2010. The Economic Impact of
the American Recovery and Reinvestment Act of 2O09. Fifth Quarterly Report. Available at: http://www.whitehouse.gov/sites/default/
files/cea_5 th_arra_report.pdf
CLEAN WATER AND DRINKING WATER STATE REVOLVING FUND PROGRAMS
-------
THE SRF PROGRAMS DELIVER RESULTS
EPA and the states worked closely together to
ensure that ARRA funds were awarded to high-
priority eligible water and wastewater projects
as soon as possible after the enactment of the
Recovery Act. For example, California's Clean
Water SRF funded its first ARRA project the
same day it received stimulus money from EPA.
By June 17, 2009, SRF programs had executed
150 assistance agreements, obligating more than
$316 million for clean water and drinking water
infrastructure projects. Maine distinguished it-
self by awarding nearly 50 percent of its SRF
funds to assistance recipients by June 17, 2009.
By October 17, national numbers had increased
dramatically, with 1,342 assistance agreements
obligating nearly $2.4 billion to projects and
1,169 projects under construction. Twenty-three
state SRF programs (including Puerto Rico) had
obligated more than 50 percent of their ARRA
funds, and 15 states had over 50 percent of their
ARRA funds under construction.
In March 2010, all states submitted certifica-
tion that their ARRA funds were under con-
FIGURE 2: ARRA REQUIREMENTS AT A GLANCE
February 17, 2010: All ARRA funds must be
under contract or construction.
State Match: No state matching funds are
required.
Additional Subsidization: At least 50 percent
of ARRA funds must be used to provide
additional subsidization, such as grants, principal
forgiveness, or negative interest rate loans.
Green Project Reserve: Where applications are
made, at least 20 percent of ARRA funds must
be used for four types of projects -
(1) Water efficiency improvements,
(2) Energy efficiency improvements,
(3) Green infrastructure, and
(4) Environmentally innovative projects.
Buy American: All iron, steel, and manufactured
goods incorporated into projects that receive
any ARRA funds must be made in the United
States unless a waiver is received from EPA.
Davis-Bacon Wage Rates: All laborers and
mechanics working on projects funded in whole
or in part by ARRA must be paid prevailing wages
as determined by the U.S. Department of Labor.
6
IMPLEMENTATION OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009
-------
tract or construction by February 17, 2010. In
total, more than three thousand (3,272) assis-
tance agreements were signed, totaling $5.6
billion — $3.8 billion for wastewater projects
and $1.8 billion for drinking water projects —
in one year. In addition, 2,832 ARRA drink-
ing water and wastewater projects had begun
construction by February 17, 2010, generat-
ing thousands of jobs in construction and
other industries.
The economic stimulus effects from these
investments in water and wastewater infra-
structure will continue to be felt in communi-
ties as SRF projects progress to completion.
ARRA FUNDING OF SRF
PROJECTS HELPS TO ENSURE
CLEAN WATER AND SAFE
DRINKING WATER FOR THE
NATION
State SRF programs used ARRA dollars to fund
a wide range of project types with significant
water quality and public health benefits. Our
water and wastewater infrastructure is often
taken for granted, even though many indicators
such as rapidly aging infrastructure, popula-
tion growth, and geographic shifts suggest that
community spending on this life-sustaining in-
frastructure is inadequate to meet the needs of
the future. ARRA funding of the SRF programs
helped to mitigate these concerns.
For the Clean Water SRF programs, ARRA-
funded projects include upgrades at publicly
owned treatment works, such as rehabilitation
of failing systems and upgrades of treatment
FIGURE 3: ARRA FUNDING PROGRESS BY THE SRF PROGRAMS
100%
a, 90%
Is 80%
70%
60%
50%
40%
30%
20%
10%
0
I
00
T3
<
4—
o
Assistance Agreements
Construction Started
June 17,
2009
Oct. 17,
2009
Feb. 17,
2010
CLEAN WATER AND DRINKING WATER STATE REVOLVING FUND PROGRAMS
-------
processes and correction of sewer overflows,
as well as nonpoint source (NFS) and estuary
projects. Among others, NFS and estuary proj-
ects include green stormwater management
projects to reduce erosion and the flow of nu-
trients and harmful chemicals into our nation's
waterways. These projects will help protect
and improve our nation's waterways for aquatic
life and wildlife, recreation, agriculture, and in-
dustrial use.
Drinking Water SRF AREA funds are fund-
ing treatment facility construction and up-
grade as well as storage, transmission, and
distribution projects. Many of these improve-
ments were needed to ensure compliance with
the health-based standards of the Safe Drink-
ing Water Act and improve water systems
funds awarded by the SRFs were in the form
of additional subsidization — well above the
50 percent requirement. For the Clean Water
SRF programs, grants and principal forgive-
ness accounted for $2.9 billion, or 76 percent,
of ARRA funds awarded. Negative interest,
grants, and principal forgiveness amounted
"Clean, safe water is one of the bedrock foundations of communities and
an economy that can grow and thrive. This money is an important start to
upgrade our aging infrastructure, while creating well-paid, 'green jobs."
Ira Leighton
United States Environmental Protection Agency, Region 1,
Deputy Regional Administrator
threatened by contamination due to aging
infrastructure. Additionally, funds directed
to small and disadvantaged communities will
extend access to safe drinking water where
current systems are inadequate or failing.
ARRA SUBSIDIES ALLOW
COMMUNITIES TO
BUILD CRITICAL WATER
INFRASTRUCTURE
The Recovery Act allowed states to provide
additional subsidization for SRF projects in
the form of principal forgiveness, grants,
negative interest, or a combination. Nearly
three-quarters (74 percent) of total ARRA
to $1.3 billion, or 71 percent, of ARRA funds
awarded by the Drinking Water SRF pro-
grams. Principal forgiveness was most com-
monly offered as subsidy by states because
most states found it easier to administer than
grants or negative interest.
Many states provided additional subsidiza-
tion for projects in economically disadvan-
taged communities or for projects eligible for
the Green Project Reserve (GPR). The provi-
sion of additional subsidy for ARRA projects
offered a rare opportunity for disadvantaged
communities — those that cannot afford to build
new systems or charge the higher rates neces-
sary to repay loans — to address long-standing
IMPLEMENTATION OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009
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NATIONAL GPR FUNDING PER CATEGORY
Energy Efficiency - $744 M
Water Efficiency - $491 M
Green Infrastructure - $200 M
Environmental Innovations - $232 M
deficiencies in their water and wastewater in-
frastructure. Additionally, Rod Geisler, Chief
of the Municipal Programs Section of the Bu-
reau of Water at the Kansas Department of
Health and Environment, expressed the view
that offering additional subsidization for GPR
projects attracted borrowers who would not
normally apply for Clean Water SRF funding.
Indeed, many states received applications from
nonprofit organizations for projects that were
eligible for the Green Project Reserve.
ARRA subsidies were crucial in advancing
long-sought water and wastewater system
improvements in many communities. For ex-
ample, Colorado water utilities face significant
hurdles upgrading systems that are, in some
cases, decades old. "The staff at the Colorado
Department of Public Health and Environ-
ment £CDPHE] was extremely diligent about
identifying priority water projects, reviewing
engineering designs, and working closely with
the Colorado Water Resources and Power De-
velopment Authority and the Department of
Local Affairs to get these dollars out the door
and into the economy," said Martha Rudolph,
the executive director at CDPHE. "Many of
these projects have been on our list of identi-
fied projects for years and have significant in-
frastructure needs for the protection of public
health and the environment. Without Recov-
ery Act funding and loan forgiveness, the proj-
ects would not have been possible."
PROMOTING LONG-TERM
SUSTAINABILITYWITH THE
GREEN PROJECT RESERVE
ARRA required states to allocate at least 20
percent of their ARRA capitalization grant
awards to the Green Project Reserve, which
included four types of projects: green infra-
structure, water efficiency improvements, en-
ergy efficiency improvements, and environ-
mentally innovative activities. Although these
types of projects have always been eligible for
Clean Water SRF financing, funding of them
has varied among the state SRF programs,
and the 20 percent ARRA requirement was
intended to accelerate the incorporation of
"green" and sustainable concepts into waste-
water and drinking water projects. EPA Ad-
ministrator Lisa Jackson called the GPR "one
of the most exciting aspects of the Recovery
Act."
In one year, the SRF programs allocated
$1.7 billion to the Green Project Reserve,
well above the 20 percent requirement.2 As
Figure 5 shows, 45 percent of the funding
went towards improving energy efficiency
"These types of loans have offered
communities throughout our state
opportunities to move forward
with projects when finding other
sources of financing might
be difficult. This is a good
partnership between local, state,
and federal governments."
Justin P. Wilson
Comptroller, Tennessee Local Development
Authority
2 Though states did report for GPR up to the 20 percent requirement, many did not account for additional projects or portions thereof
that qualified as green projects.
CLEAN WATER AND DRINKING WATER STATE REVOLVING FUND PROGRAMS
-------
at wastewater and drinking water treatment
plants, including installation of premium effi-
ciency pumps and blowers, electricity system
upgrades, and installation of wind turbines
and solar panels at clean water and drinking
water facilities. Another 29 percent went to-
wards water efficiency projects, which include
installation of water meters, water reclama-
tion activities, and replacement of water-us-
ing fixtures. Green stormwater infrastructure
projects accounted for 14 percent of GPR
funding and include rain gardens, green roofs,
street tree boxes, and pervious pavement. Fi-
nally, 12 percent of GPR funds went towards
environmentally innovative projects, which
include wetland restoration, decentralized
wastewater treatment systems, adaptive mea-
sures to cope with climate change impacts,
and use of other innovative technologies.
These projects will save communities money
in energy costs and contribute to long-term
sustainability by reducing pressure on limited
drinking water resources, protecting surface
waters from contaminated stormwater runoff,
and reducing the carbon footprint of the na-
tion's water infrastructure.
"These funds will contribute significantly towards improving the
sustainability of our wastewater operations and prepare us for Austin's
growing population."
Greg Meszaros
Director, Austin Water Utility
FIGURE 4: ARRA FUNDING FOR GPR PROJECTS AND PROJECT COMPONENTS
ARRA Funding for Traditional
SRF Projects
ARRA Funding for GPR
Energy Efficiency
Water Efficiency
Green Infrastructure
Environmental Innovation
IMPLEMENTATION OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009
-------
CLEAN WATER STATE REVOLVING FUND
CASE STUDIES
WEST MONROE, LOUISIANA: PRESERVING TOBS WHILE SAVING WATER
West Monroe is a small town in Louisiana
with a population of 13,500. In recent years,
several large employers have closed busi-
nesses in West Monroe and taken good jobs
with them when they left. Graphic Packaging
International, Inc. (GPI), a manufacturer of
paper food and beverage packaging that em-
ploys 1,200 people in the town and 637 other
workers that harvest timber and transport it
to the plant might have been the latest em-
ployer to leave West Monroe but for AURA.
GPI's manufacturing processes currently rely
on water from the Sparta Aquifer, which also
serves as a source of ground water for 16 par-
ishes in northern Louisiana. The aquifer is cur-
rently overdrawn by 17 to 18 million gallons
per day (MGD). As a result, GPI's wells in the
aquifer are increasingly salty and corrosive.
Several years ago, the town of West Monroe
and GPI began working together to develop
an innovative solution to the water shortage
in the Sparta Aquifer. They implemented a pi-
lot project to test an innovative combination
of drinking water treatment technology —
dissolved air flotation followed by pressurized
granular activated carbon and chlorination —
to treat wastewater for reuse in GPI's indus-
trial processes. For GPI to use the recycled
water to manufacture food and beverage pack-
aging, treated wastewater effluent must meet
EPA Primary Drinking Water Standards and
stringent FDA contamination levels. The
treated water passed both tests.
Thanks in part to a $4,750,000 AURA loan
with 100 percent principal forgiveness, West
Monroe and GPI are now seeing their part-
nership come to fruition with the full-scale
installation of their tested treatment pro-
cess into an existing 7.5 MGD wastewater
treatment plant. This ARRA-funded water
efficiency project is part of the Green
CLEAN WATER AND DRINKING WATER STATE REVOLVING FUND PROGRAMS
11
-------
Project Reserve, and the new treatment plant
will virtually eliminate the current pollution
discharged into the Ouachita River by the
existing treatment facility. Water reuse will
significantly reduce GPI's current 10 MGD
demand for process water from the Sparta
Aquifer, providing relief from severely de-
clining water levels in the aquifer. In addition
to the direct and indirect jobs supported by
project construction, many in West Monroe
credit this project with helping to preserve
the 1,200 local jobs that are the lifeblood of
this small community.
LINCOLN COUNTY, WEST VIRGINIA: DECENTRALIZED SYSTEMS FOR THE
ECONOMICALLY DISADVANTAGED
Communities in southern West Virginia, in-
cluding Lincoln County, are some of the
poorest and most rural in the state. These
communities have very little capacity to as-
sume debt for infrastructure improvements,
but studies in some communities show that
approximately 67 percent of households have
inadequate wastewater treatment.3 Many
homes discharge raw sewage into rivers and
streams via straight pipes, and the vast ma-
jority of streams in the region are severely
impaired by fecal coliform and related pollut-
ants. Despite significant wastewater needs,
there are few financial resources available to
these small, rural communities.
To address some of these problems, the Lin-
coln County Commission and West Virginia
Department of Environmental Protection
(DEP) began a project funded by the U.S.
EPA in 2005 to demonstrate the water quality
benefits of installing innovative decentralized
wastewater systems for homes where current
septic systems were failing or nonexistent.4
As of October 2009, 40 homes either had new
systems installed or had bids awarded for in-
stallation. As part of these efforts, a variety
of electronic and paper reports will be shared
with project stakeholders, state agencies, leg-
islators, and the community; workshops will
highlight findings from the project, lessons
learned, and areas needed for improvement;
and educational flyers will provide informa-
tion to homeowners to help them understand
and maintain their wastewater systems.
The Recovery Act helped extend these efforts
by allowing DEP and the Lincoln County
Canaan Valley Institute. February 20O8. Developing Effective Wastewater ManagementinRural, Low Income West Virginia Communities.
Available at: http://www.canaanvi.org/canaanvi_web/uploadeciFUes/Wastewater/IJncoln_Co_FlexE_Conference_Report.pdf.
4 U.S. EP A (2005). Lincoln County - US EPA Cooperative Project: Final Report—Key Lessons Learned.
Available at http://www.epa.gov/owm/septic/pubs/mudriverwv_fiiialreport.pdf
IMPLEMENTATION OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009
-------
Commission to address additional wastewa-
ter needs of residents in Lincoln County. The
Commission is using a $718,626 ARRA loan,
all of which is being provided in the form of
principal forgiveness, to fund the construction
of on-site wastewater systems for 19 residen-
ces in the community of Alkol, in the Left Fork
watershed of the Mud River. The systems use
innovative peat filters that pretreat septic sys-
tem effluent, removing high concentrations of
nutrients and producing a high-quality efflu-
ent with less biological oxygen demand, fewer
total suspended solids, and reduced fecal coli-
form bacteria. Construction is expected to be
completed by November 2011. The on-site
systems will replace direct discharges from
homes or failing septic systems and reduce pol-
lutants that are negatively impacting surface
and ground water in the watershed, helping to
protect the environment and public health.
GEORGETOWN, COLORADO: PROTECTING A THREATENED WATERSHED
WITH POTW UPGRADES AND INNOVATIONS
The historic silver mining town of George-
town is nestled among some of Colorado's
most majestic mountain peaks near the head-
waters of the Clear Creek Watershed. The
575-square-mile Clear Creek Watershed
stretches from the Continental Divide down
to the urbanized plains at its confluence with
the South Platte River just north of Denver.
Clear Creek serves as the principal drinking
water source for more than one-quarter mil-
lion people living in the Denver metropolitan
area, as well as the upper Clear Creek Water-
shed communities that include Georgetown,
Silver Plume, Empire, Idaho Springs, Black
Hawk, and Central City. It is also prime ripar-
ian and wildlife habitat and a favorite among
locals and tourists for recreational activities
like kayaking, rafting, and fishing. However,
Clear Creek is struggling with excessive nu-
trient loading, impairments associated with E.
coli, sedimentation, and the residual effects of
Colorado's storied mining past.
Georgetown received a $5.8 million ARRA
loan with $2 million in principal forgive-
ness from the Colorado Department of Pub-
lic Health and Environment to upgrade the
town's existing wastewater treatment facility.
The facility's conventional activated sludge
treatment process will be replaced with ad-
vanced biological nutrient removal and up-
flow reactive sand filters for enhanced reduc-
tion in phosphorus and zinc levels in treated
effluent. Upgrades also include the addition
of biological de-nitrification unit processes
using anoxic reactors for nutrient removal,
which will reduce the need for chemical treat-
ment at the facility.
This project will improve the quality of Clear
Creek and aid in protecting a valuable drink-
ing water source while also undertaking sus-
tainable design planning considerations and
construction methods. Xeriscaping and stabi-
lization controls put in place during construc-
tion are designed to minimize surface run-off
and erosion. The facility will also implement
a facility-wide non-potable water system de-
signed to utilize treated effluent for opera-
tional processes such as wash-down water,
toilet flushing, landscape irrigation, and on-
site chemical generation.
CLEAN WATER AND DRINKING WATER STATE REVOLVING FUND PROGRAMS
-------
SELECTED PROGRAM AND PROJECT HIGHLIGHTS
REGION 1
Rhode Island advanced water conservation by allocat-
ing 43 percent of its ARRA Drinking Water SRF capital-
ization grant to water efficiency projects.
REGION 2
New York's new "Green Innovation Grant Program"
funded nearly 50 sustainable clean water and drinking
water projects worth over $44 million by leveraging
partnerships with other state agencies and reaching
out to municipalities, nonprofits, and businesses.
REGIONS
Maryland funded numerous stormwater management
projects under its "Living Shorelines Stewardship
Initiative/' which aims to improve water quality and
enhance habitat in the Chesapeake Bay. Together,
Pennsylvania and Maryland account for 35 percent of
all stormwater projects.
REGION 4
Florida directed 50 percent of its ARRA capitalization
grants to economically disadvantaged communities
with important water and wastewater needs.
REGIONS
Ohio ensured that a wide variety of communities ben-
efitted from stimulus funding by providing assistance
to 335 projects - more than two times that of any
other state.
Wisconsin leads the nation in disbursing ARRA funds,
with 96.5% of its ARRA capitalization grants outlayed
through December 31, 2010.
REGIONS
Texas is funding an environmentally innovative proj-
ect to enhance treatment and handling of biosolids,
which will save thousands of dollars in energy costs
per year, reduce the carbon footprint of the treatment
facility, and create 560 local jobs in the city of Austin.
REGION?
Kansas prioritized sustainable water and wastewater man-
agement and treatment by allocating almost 85 percent of
its ARRA capitalization grant to the Green Project Reserve.
REGIONS
ARRA-funded drinking water projects in Colorado will
deliver $7.3 million in savings over the next 20 years
through increased energy efficiency, reduced operat-
ing costs, restored billing revenue, and avoided main-
tenance costs.
The Recovery Act is helping to fund construction of a wa-
ter treatment plant in South Dakota that is expected to
create or save approximately 600 construction jobs over
the nearly three-year life of the project.
14
IMPLEMENTATION OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009
-------
REGION 9
California is funding six projects for one water utility
serving nearly one million residents to advance its
comprehensive strategy to be energy self-sufficient
and off the electric grid by 2020.
REGION 10
Washington funded over $5 million worth in green
stormwater management projects that will help to ad-
dress the number-one cause of urban water pollution
in the state.
The Alaska Clean Water SRF program is funding the
first LEED-certified building in Alaska, which is de-
signed as a zero-waste and zero net energy resource
recovery and training facility.
CLEAN WATER AND DRINKING WATER STATE REVOLVING FUND PROGRAMS
15
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DRINKING WATER STATE REVOLVING FUND
CASE STUDIES
WORCESTER MASSACHUSETTS: HARNESSING SOLAR ENERGY FOR CLEAN WATER
In 2007, The Executive Office of Energy and
Environmental Affairs and the Massachusetts
Department of Environmental Protection
launched the first phase of the Massachusetts
Energy Management Pilot for Drinking Water
and Wastewater Treatment Facilities. A total
of 14 facilities are currently part of this project,
including 7 wastewater facilities and 7 drink-
ing water treatment facilities, with the purpose
of reducing the amount of energy used in mu-
nicipal treatment facilities and greenhouse gas
emissions by 20% while also saving local com-
munities money through the establishment
of public-private partnerships. In addition to
working with the Department of Energy Re-
sources, EPA Region 1, The Massachusetts
Renewable Energy Trust, the Consortium for
Energy Efficiency University of Massachusetts
at Amherst, and major gas and electric utilities,
each of these projects has also received funding
through the SRF program and ARRA. Through
these sources, all 14 pilot projects, which total
$45.8 million, as well as an additional 7 "green
sites," were fully funded. In total, these 21 sites
are estimated to realize over $5 million in po-
tential energy savings, and over 29 million kWh
are expected to be saved annually — enough to
power 3,450 average-sized homes for a year.5-6
Senator John Kerry said, "This investment will
help sustain our high clean drinking water stan-
dards without using so much energy Facilities
throughout our state can continue to ensure our
water is clean and safe, reduce harmful greenhouse
gas emissions, and help put people back to work."
Massachusetts DEP (2010). The Massachusetts Energy Management Pilot.
Available at http://www.niass.gov/dep/water/wastewater/empilot.htm.
U.S. Energy Information Administration, March 2010. Independent Statistics and Analysis available at
http://www.eia.doe. gov/ask/electricity_faqs.asp#electricity_use_home.
16
IMPLEMENTATION OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009
-------
As part of the Massachusetts Energy Manage-
ment Pilot, the city of Worcester is undertak-
ing a $1.2 million project funded by AKRA to
increase energy efficiency and the use of renew-
able energy at its water treatment plant (WTP).
The WTP processes over 11 billion gallons of
drinking water for 200,000 customers annually.
To enhance energy efficiency and reduce the
WTP's carbon footprint, Worcester will in-
stall an energy management system, upgrade
its heating system, and install a 150 kW solar
photovoltaic system at the WTP. The city will
install an additional solar system at one or more
qualified water treatment facilities or adminis-
tration buildings. In total, these green invest-
ments will account for over $45,000 in annual
energy savings and approximately 293 tons of
annual carbon dioxide emissions reductions.
GALVESTON, TEXAS: IMPROVING WATER SERVICE AFTER
HURRICANE IKE
In 2008, Hurricane Ike devastated infrastruc-
ture in the city of Galveston, including its
water system. In the aftermath, Galveston's
city manager, Steve LeBlanc, said, "Our water
system is bleeding, literally bleeding.... [A]t
this point we have so many leaks in the sys-
tem, we're basically bleeding out more (water)
than we're pushing into the system." Since
then, repairs have improved the water system,
but the city's water distribution system still
has insufficient capacity to serve the west end
of Galveston Island. The Texas Commission
on Environmental Quality (TCEQ) cited the
city for both insufficient storage and pressure,
and the city entered into an agreed order with
TCEQ that requires the city to meet a mini-
mum total capacity of 0.6 gallons per minute
per connection requirement and a minimum
elevated storage capacity of 100 gallons per
connection, among other conditions.
To comply with the order, the city proposed
five water capacity projects and received a
$17.2 million AURA grant from the Texas
Water Development Board. The water distri-
bution system improvements include:
• installation of pressure-sustaining valves
that will maintain water volume and
pressure for the west end of Galveston;
• installation of 8,393 linear feet of water
line to serve the west end of Galveston;
• construction of a new 2.0 MGD elevated
storage tank (EST) and disinfection sys-
tem at Isla del Sol;
• rehabilitation of the White Sands EST,
which was damaged by Hurricane Ike,
with a new PVC coated fence, inside and
outside tank coating, and drainage pipe
supports; and
• construction of a new 2.0 MGD elevated
storage tank, disinfection system, and
pumping station.
The combined improvements in this disadvan-
taged community will help ensure continuous
water service for over 100,000 people that are
CLEAN WATER AND DRINKING WATER STATE REVOLVING FUND PROGRAMS
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served by the system. The AURA subsidy was
critical for the water system improvements, as the
city qualifies as a disadvantaged community with
an adjusted median household income (MHI) for
the service area that is less than 75 percent of
the state MHI and a household cost factor that is
greater than 2 percent for water services.
MONTEREY COUNTY, CALIFORNIA: PROVIDING SAFE WATERTO THE
SEVERELY DISADVANTAGED
The small, rural community of San Jerardo in
Monterey County is the first housing coopera-
tive in California for low-income farm worker
families. It was once a dilapidated farm labor
camp, but it is now a community of about 300
residents where all families are able to partici-
pate in decision making that affects the residents.
Although San Jerardo is only located about
five miles south of water and wastewater in-
frastructure serving the city of Salinas, water
quality service in San Jerardo is quite differ-
ent. The San Jerardo community has been un-
der a bottled water order for drinking water
since 2001. Well water from the area exceeds
the maximum contaminant levels for nitrate —
an acute contaminant — and trichloropropane
(TCP), which is recognized by California as
a cancer-causing agent. An EPA lawsuit re-
sulted in the San Jerardo water system being
placed under federal court receivership for
violations of the federal Safe Drinking Water
Act.7 Due to high levels of water contamina-
tion, the process of finding a new water op-
erator stalled for years, and pursuit of state
and federal funds was delayed.
Under the federal receivership, the Monterey
County Board of Supervisors spearheaded
efforts to provide San Jerardo with an onsite
emergency treatment system using absorp-
tion and ion exchange technology to remove
nitrate and TCP. The system was implement-
ed in 2007, but the community has struggled
to pay the costs associated with operating and
maintaining the interim system, further punc-
tuating the need for a permanent solution to
the public health and water quality problems.
In response to an AURA project application
by Monterey County, the California Depart-
ment of Public Health issued a $2.7 million
loan with 100 percent principal forgiveness to
upgrade the San Jerardo drinking water sys-
tem and bring it into compliance with regula-
tions. It will include a new drinking water sup-
ply production well, a new storage reservoir, a
new transmission pipeline and booster station,
and emergency intertie for secondary supply.
ARRA subsidization of this project, in the
form of principal forgiveness, was critical.
The California Department of Public Health
lists San Jerardo as a severely disadvantaged
community with a median household income
(MHI) that is less than 60 percent of the
statewide annual MHI. The community has
struggled with paying the onsite emergency
treatment costs while waiting for a new well,
and it could not afford the additional expense
associated with a new system. ARRA subsidies
will relieve some of the community's financial
stress while helping to protect public health.
California State Water Resources Control Board (2010). Board Meeting Session — Division of Financial Assistance. March 16, 2010.
IMPLEMENTATION OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009
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APPENDIX:
COORDINATED IMPLEMENTATION OF ARRA
The American Recovery and Reinvestment Act
of 2009 presented new challenges and opportu-
nities for the SRF programs, with new require-
ments and new authorities.
In order to get the funds to communities as
quickly as possible, Congress required that
EPAs Administrator reallocate funds where
projects were not under contract or construc-
tion within one year of enactment. In addition,
Congress stated a goal of having at least half of
the funds under contract within 120 days. Con-
gress eliminated state match requirements and
required states to provide at least 50 percent of
Federal ARRA funds in the form of addition-
al subsidization. Congress also required that,
where sufficient applications were submitted, 20
percent of the funds go towards four categories
of green projects — green infrastructure, wa-
ter efficiency improvements, energy efficiency
improvements, and environmentally innovative
activities. Additional new provisions passed on
to local recipients of ARRA loans and grants
included requirements to buy American iron,
"The Recovery Act has pulled
our nation back from the worst
economic crisis in generations and
provided real relief for families
and small businesses. EPA's
investments in green jobs and
clean communities are growing
our economy and building a
new foundation for prosperity.
We're putting people to work
and creating cleaner, healthier
environments that are better
places to buy a home or set up a
business."
Ltsa P. Jackson
United States Environmental Protection
Agency Administrator
steel, and manufactured goods and to pay labor-
ers and mechanics at prevailing wage rates.
CLEAN WATER AND DRINKING WATER STATE REVOLVING FUND PROGRAMS
19
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EPA focused its efforts on moving money
quickly and providing support for state SRF
program implementation of ARRA require-
ments. While Congress was passing legisla-
tion, EPA held online webcasts, meetings, and
conference calls with state and Regional EPA
SRF staff to discuss how potential provisions
might be implemented. EPA worked quickly
to release guidance when the final version of
the Recovery Act legislation was passed and
signed by the President on February 17th,
2009. EPA published the final ARRA guid-
ance less than two weeks later, on March 2nd.
The quick reaction by EPA allowed states to be-
gin implementing the provisions of ARRA with
minimal delay. After years of successfully man-
aging large water quality programs such as the
SRFs, states hit the ground running. In fact, a
number of states began reaching out to commu-
nities to identify "shovel-ready" projects several
months before the stimulus package passed.
Due to the significant amount of publicity in
advance of the passage of the Recovery Act,
states received many more — sometimes more
than ten times more — inquiries for funding than
they typically received in a year. In addition,
state SRF staff proactively reached out to com-
munities to identify potential ARRA projects.
State employees reviewed thousands of initial
applications to prioritize the projects based on
economic impact, financial need, environmental
benefit, public health, and adherence to ARRA
goals and requirements. State SRF programs
accomplished all of this work despite facing fur-
loughs and hiring freezes in many cases.
FIGURE 5: HOW THE ARRA MONEY MOVES
THROUGH THE SRF PROGRAMS
CONGRESS/TREASURY
$6 B Appropriation
EPA SRF PROGRAMS
Capitalization Grants
STATE AGENCIES
State agencies
identify projects
for funding
Assistance
recipients prepare
projects, request
bids and awards
Loan
Repayments
Grants and
Low-interest Loans
ASSISTANCE RECIPIENTS
Project construction
begins; contractors
and vendors submit
invoices for services
Payments
for Services
CONTRACTORS
AND VENDORS
IMPLEMENTATION OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009
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ARRA TIMELINE - REQUIREMENTS AND ACHIEVEMENTS
2009'
-0—0-
FEB MAR APR MAY JUN JUL AUG
OCT NOV
I
2010
JAN FEB
DEC
FEBRUARY 17, 2009: President
Obama signs American Recovery
and Reinvestment Act of 2009,
appropriating $4 billion to the Clean
Water SRF programs and $2 billion to
the Drinking Water SRF programs to
aid in the economic recovery.
FEBRUARY - JULY: EPA conducts
more than 10 online webcasts for
states and municipalities about
ARRA implementation topics.
MARCH 2, 2009: EPA publishes
final guidance on ARRA
implementation.
MARCH 12, 2009: EPA awards the
first SRF ARRA funds to several
states.
APRIL 28, 2009: EPA issues
Buy American implementation
procedures and establishes a
waiver process.
MAY -- NOVEMBER: State SRF
programs, often with assistance
from EPA, conduct dozens of
workshops for ARRA assistance
recipients about program
requirements.
22, 2009: EPA publishes
Questions and Answers on the
Green Project Reserve, responding
to common inquiries.
EPA publishes
project tracking and reporting
guidance. At the same time, the
ARRA project data entry system
goes live in the Clean Water SRF
Benefits Reporting System and
the Drinking Water SRF Project &
Benefits Reporting System. States
can now enter all of the program
progress and jobs data required
by the Administration, Congress,
and EPA into a simple form for easy
download.
AUGUST 17, 2009: Six months
after ARRA is authorized, 29 Clean
Water SRF state programs have
awarded $663 million in ARRA
assistance to 318 projects, and 31
Drinking Water SRF state programs
have provided $339 million in
ARRA assistance to 234 projects.
9: All states are
required to report on ARRA progress
and jobs created and maintained
to the Office of Management and
Budget for the first time.
ARRA funds
have been awarded to all 50 states
and Puerto Rico.
NOVEMBER 17, 2009: Nine
months after ARRA is authorized,
48 state Clean Water SRF programs
have made $2 billion in loans
and grants to 965 projects, and
45 Drinking Water SRF programs
have made $905 million in loans
and grants to 737 projects. Of
these, 1,697 projects have begun
construction in both SRF programs,
and $752 million in financing
for 622 GPR projects has been
awarded.
JANUARY 15-22, 2010: States
are required to submit a second
round of quarterly reports on
ARRA progress and jobs created
and maintained to the Office of
Management and Budget.
FEBRUARY 17, 2010: States
certified that all ARRA funds are
under contract or construction in
the Clean Water SRF and Drinking
Water SRF programs, with $3.8
billion in ARRA Clean Water SRF
assistance provided and $1.8
billion in ARRA Drinking Water SRF
assistance.8 All state SRF programs
have met the Green Project
Reserve requirement, with a total
of $1.7 billion awarded to green
projects nationwide.
DECEMBER 31, 2010: States have
disbursed more than 70% of available
ARRA capitalization grant funds.
8 States are authorized to use up to 4% of their capitalization grants for administration of the program. In addition, 1% of the dean Water
SRF allotment is diverted to the 604(b) Water Quality Management Planning Grant program, and Drinking Water SRF programs may
divert as much as 17% of their grants for set-asides that benefit drinking water quality.
CLEAN WATER AND DRINKING WATER STATE REVOLVING FUND PROGRAMS
-------
ARRA STATISTICS AT A GLANCE
K^^
CLEAN WATER STATE REVOLVING FUND
DRINKING WATER STATE REVOLVING FUND
Total ARRA Assistance Provided1
Total ARRA Assistance Disbursed3
Total ARRA Funding Agreements1
ARRA Funding Agreements by
Population Size1
< 3,500
3,500-9,999
10,000-99,999
100,000 and Above
Total ARRA Principal Forgiven or
Grants4
Total ARRA Green Project Reserve4
Total FY2010 Assistance Provided
(ARRA and Base)1
$3.81 billion
$2.8 billion
1,913
No. $ billions
791 $0.90 billion
327 $0.63 billion
575 $1.19 billion
220 $1.09 billion
$2.90 billion
$1.1 billion
$10.0 billion
Total ARRA Assistance Provided2
Total ARRA Assistance Disbursed3
Total ARRA Funding Agreements2
ARRA Funding Agreements by
Population Size2
<501
501-3,300
3,301-10,000
10,001-100,000
100,001 and Above
Total ARRA Principal Forgiven,
Negative Interest, or Grants5
Total ARRA Green Project Reserve5
Total FY2010 Assistance Provided
(ARRA and Base)2
No.
233
410
275
354
87
$1.80 billion
$1.4 billion
1,359
$ billions
$0.13 billion
$0.34 billion
$0.36 billion
$0.64 billion
$0.34 billion
$1.3 billion
$538 million
$3.83 billion
1 EPA dean Water SRF National Information Management System. Data through 6/30/10.
2 EPA Drinking Water SRF National Information Management System. Data through 6/30/10.
3 EPA Integrated Financial Management System. Data through 12/31/10.
* dean Water SRF Benefits Reporting Systems. Data through 1/24/11.
5 Drinking Water SPvF Project and Benefits Reporting Systems. Data through 1/24/11.
22
IMPLEMENTATION OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009
-------
CLEAN WATER STATE REVOLVING FUND BRANCH
U.S. ENVIRONMENTAL PROTECTION AGENCY
1200 Pennsylvania Avenue, NW (Mail Code 4204M)
Washington, D.C. 20460
Phone 202.564.0752 Fax 202.501.2403
http://water.epa.gov/grants_funding/cwf/cwsrf_index.cfm
DRINKING WATER STATE REVOLVING FUND PROGRAM
U.S. ENVIRONMENTAL PROTECTION AGENCY
1201 Constitution Avenue, NW (Mailcode 4606M)
Washington, D.C. 20004
Phone 202.564.2051 Fax 202.564.3757
http://water.epa.gov/grants_funding/sdwa/index.cfm
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OFFICE OF WATER • MAY 2011 • EPA-832-K-11-001
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