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    FACT
  SHEET
                                                                 Clean Water
                                                                 State Revolving  Fund
                             Funding Wet Weather Projects with
                          the  Clean Water State  Revolving Fund
The Problem
"Wet weather discharges" refers collectively to
discharges that result from precipitation events, such as
rainfall and snowmelt. The primary sources of these
discharges are storm water runoff from paved surfaces
and other impervious areas, agricultural land and animal
feeding operations, municipal separate storm sewer
systems (MS4), combined sewer overflows (CSO) and
sanitary sewer overflows (SSO).

Storm water discharges from MS4s are a major concern
in urbanized areas due to the high concentration of
pollutants found in these discharges. Urbanized areas,
because of dense development, have a high concentration
of impervious surfaces, such as city streets, driveways,
parking lots, and sidewalks, on which pollutants settle
and remain until a storm event washes them into nearby
storm drains. The most common pollutants include
                     pesticides, fertilizers, oils, salts,
                     litter and other debris, and
                     sediment.

                     Runoff from agricultural
                     sources is often the result of
                     improper management of
                     manure and animal
                     wastewater as well as
                     pesticides and fertilizers used
                     on crop land. When left
                     uncontrolled, these discharges
                     can result in fish kills, the
                     destruction of spawning and
wildlife habitats, a loss in aesthetic value, and
contamination of drinking water supplies and recreational
waterways that threatens public health.
Sediment accumulation
at a construction site.
Combined sewer systems are sewers designed to collect
rainwater runoff, domestic sewage and industrial
wastewater in the same pipe. During periods of heavy
rainfall or snowmelt, the total volume of wastewater within
the system may exceed the system's capacity. The system
is designed to overflow in a controlled manner by
discharging untreated wastewater directly into nearby
streams, rivers or other water bodies. These overflows
contain not only storm water but also untreated human and
industrial waste, toxic materials, and debris.

Sanitary sewer systems collect and transport all of the
sewage that flows into them to a publicly owned treatment
works. Occasionally, these systems overflow due to
severe weather, improper system  operation and
maintenance, or vandalism. Untreated sewage from these
overflows can contaminate our waters, causing serious
water quality problems, and back up into basements,
causing serious health concerns and property damage.

Capacity of the CWSRF
Congress created the CWSRF program to provide
reduced-rate loan funding for water quality projects of all
kinds. CWSRF programs were established in every state
and Puerto Rico to work like banks. Federal and state
contributions are used to capitalize or set up the programs.
These assets, in turn, are used to make low or no-interest
loans for important water quality proj ects. Loan
repayments are then recycled to fund other important
water quality projects.

Nationally, the CWSRF has in excess of $37 billion in
assets (includes loans already made and current funds
available to make loans). Currently, the CWSRF is
funding about $3 -4 billion in water quality proj ects each

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   .Clean Water
    State Revolving Fund
             FACT
             SHEET
year. Funding from the CWSRF for polluted runoff
abatement projects (including animal feeding operations)
is gaining momentum. These proj ects have received
more than $1.6 billion in CWSRF funding since the
program's inception. In 2002, nearly 42 percent of the
CWSRF Program's assistance agreements addressed
nonpoint source or estuary pollution.

Who May Qualify
The Clean Water Act (CWA) Amendments of 1987
authorized the CWSRF to fund treatment plants (§212),
and nonpoint source (§319) and estuary (§320)
activities. As stipulated in the CWA, §212 proj ects must
be publicly owned to receive CWSRF funds. Nonpoint
source and estuary activities, however, do not have this
restriction. Included in a long list of eligible CWSRF loan
recipients for nonpoint source and estuary activities are
community groups, individuals, agricultural associations
and nonprofit organizations.
Funding Eligibilities
Because there are many sources of wet weather
discharges, there are also many types of projects related
to such discharges that may be funded by the CWSRF,
falling under different eligibilities. Combined sewer
overflow and sanitary sewer overflow correction projects
may be funded under the CWSRF's §212 point source
eligibility. CSOs and SSOs are defined by the CWA as
treatment works and therefore must be publicly owned to
be eligible.
    Storm sewer overflow following a precipitation
    event.
I

Polluted runoff from MS4s may be funded under either the
CWSRF's §212 eligibility or its §319 nonpoint source
eligibility. If a community is permitted, it is considered a
point source, and therefore, may only be funded under the
CWSRF's §212 eligibility. Communities with Phase I or
Phase II NPDES permits may
fund sewer system
rehabilitation, new collector
sewers, new interceptors,
storm sewer rehabilitation,
infiltration/inflow correction,
and stormwater management
facilities such as sediment traps^gp
and basins, constructed
wetlands, street sweepers and
catch basin vacuum vehicles,
so long as these projects
address problems in a publicly
owned system.

If a community does not have a draft or final NPDES
permit or is exempt from permitting, projects may be
funded as non-point sources of pollution under §319,
including privately-owned facilities. Types of projects
include sewer rehabilitation, infiltration/inflow correction,
and stormwater management facilities such as sediment
traps and basins, constructed wetlands, street sweepers
and catch basin vacuum vehicles. Additionally, any of the
above public and private proj ects may be funded under the
§320 eligibility if the project is located in a National
Estuary and is listed in the estuary's Comprehensive
Conservation Management Plan (CCMP).

Additionally, if a community has a draft or final permit,
activities may be funded under the program's nonpoint
source (§319) authority if the activity is not specifically
required by a draft or final NPDES permit.  This includes
both public and private activities, such as riparian buffers.
Construction BMPs are an example of activities covered
by NPDES permits, and are therefore not eligible projects
for private borrowers.

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FACT
SHEET
                                  ; Clean Water
                                   State Revolving Fund
Getting Your Project Funded
Since the program is managed by the states, project
funding varies according to the priorities, policies, and
laws within each state. Eligible applicants also vary by
state. The necessary first step in obtaining CWSRF
funding is to get the activity/proj ect listed in a state's
priority list for §212 projects, Nonpoint Source
Management Plan for §319 proj ects or CCMP for §320
proj ects.  Contact your state's CWSRF, NFS, or Estuary
program for details. CWSRF state contacts can be found
atwww.epa.gov/owm/cwfmance/cwsrf/contacts.htm.

Sources of Repayment
Each state must approve a dedicated source of loan
repayment as part of the application process. Though
finding a source of repayment may prove challenging,
CWSRF users have identified many creative repayment
sources, which need not come from the proj ect itself.
Some possibilities include:

    * Storm water utility fees

    * Wastewater user fees

    * Dedicated portion of local, county, state tax fees

    * Fees paid by developers on other land

    * Recreational fees (fishing license, entrance fees)


Restrictions
In 1990, the Environmental Protection Agency (EPA)
promulgated rules establishing Phase I of the National
Pollutant Discharge Elimination System (NPDES) storm
water program. The Phase I program requires all medium
and large municipal separate storm sewer systems (MS4),
certain industrial activities, and construction activities
disturbing 5 acres ormoreto apply for NPDES discharge
permits and to implement a storm water management
program. A medium MS4 is one which serves a
population of 100,000 to 249,999. Alarge MS4 serves a
population of 250,000 or more. Phase II of the program,
signed in October, 1999, applies to all previously
unregulated MS4s, including small MS4s and small
construction activities disturbing between 1 and 5 acres of
land.  A small MS4 is defined as any MS4 not already
regulated under the Phase I program.

Any MS4 covered under either Phase I or Phase II of the
storm water permitting program will be regulated under
NPDES permitting authority. Therefore, a permitted MS4
is defined under the Clean Water Act as  a point source. A
point source can be funded under the CWSRF program
so long as it is a publicly owned treatment works. Any
privately owned regulated entity will therefore not be
eligible, unless the proj ect is not specifically required by a
draft or final  NPDES permit and is considered a nonpoint
source.
                                Wetlands Construction
Success Stories
The flexibility extended to state CWSRF programs and to
loan recipients has enabled many innovative wet weather
proj ects. The two proj ects hightlighted here have taken
advantage of special low interest rates and have
designated alternative repayment sources.

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Wetlands Preservation and Stormwater Management
The city of Port Townsend, Washington used the
CWSRF program to simultaneously meet storm water
management and a wetlands preservation obj ectives.  The
city purchased an area called the Winona Wetlands, a
critical storm waterbasin for the area that also provides a
Two CWSRF Stormwater Treatment Projects
Washington
CWSRF



i
$400,000 4
at 0%



Stormwater 1
feesl
r I
City of
Port Townsend

!
r


r

Purchase of
Winona Wetlands
to control runoff
and preserve
habitat





0
CWSRF makes a
low-interest loan to
a municipality or
private entity* for a
wet weather project.
0
Loan recipient
implements
the Stormwater
treatment project
•*3*;
Community or
private entity repays
the low-interest loan
to CWSRF


Michigan
CWSRF
$101M
4


at 2-2.5%
(9 loans)


Municipal |
revenue/ 1
^ r Sewer fees |
City of Saginaw

i
{



r

i
Construction 01
1 retension-treatment 1
basins and
1 additional combined 1
sewer capacity.
V )
Loans to private entities limited to nonpoint source projects
where authorized by the state.
valuable wildlife habitat. The city's purchase protects the
wetlands from further development. Development would
have resulted in storm water management problems as
well as destruction of the wetlands. The proj ect required
a $400,000 CWSRF loan at 0% interest.  The loan is to
be paid back in 5 years with a portion of the city's $5 per
household storm water utility fee.
         Addressing Combined Sewer Overflows in Michigan
         Of the 219 loans provided by Michigan's CWSRF
         program, 112 have funded combined sewer overflow
         projects. The state has committed over $950 million to
         CSO improvements, more than half of its $1.9 billion in
         total CWSRF assistance. Starting in the mid 1980s,
         Michigan initiated the NPDES permit processes for CSOs
         with approximately 80 communities.  The Department of
         Environmental Quality required optimized operation to
         minimize discharges, implementation of measures to
         eliminate raw sewage discharges, and treatment plans to
         achieve compliance with water quality standards.
         CWSRF funding has helped these municipalities implement
         long-term CSO control plans. Close to 65 of them have
         not only finished the planning process, but have also
         completed construction. Municipalities have used several
         strategies to reduce CSOs. For example, new retension-
         treatment basins and relief combined sewers have reduced
         CSO discharges to the Saginaw River by 75%, restoring
         the walleye fishery. Data is coming in from the Rouge
         River Wet Weather Demonstration Proj ect, a multi-town
         study of alternative treatment technologies, each designed
         for different Stormwater flows. The proj ect will help
         identify effective CSO controls for Detroit and Dearborn
         as well as several smaller municipalities. The CWSRF
         contribution to Michigan's ambitious CSO program serves
         as a model for other states' Stormwater permitting
         processes.

         Challenges Ahead
         EPA encourages states to use their CWSRF resources to
         finance high-priority water quality projects. Those
         interested in obtaining funding for wet weather proj ects are
         encouraged to seek out their state CWSRF programs and
         apply for funding.
  For more information about the Clean Water Revolving Fund, or for a program representative in your State,
                                             please contact:


                                   U.S. Environmental Protection Agency
                             1201 Constitution Avenue, NW (Mailcode 4204M)
                                         Washington, DC 20004
                               Phone: (202) 564-0752  Fax:  (202) 501-2403
                           Internet: http://www.epa.gov/owm/cwfinance/index.htm
Office of Water
December 2003
EPA 833-F-03-005

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