EPA
Clean Water
State Revolving Fund
ACTIVITY Ohio's Restoration Sponsor Program Integrates
UPDATE Point Source & Nonpoint Source Projects
Communities in
Ohio that take
advantage of this
program recognize
that wastewater
treatment system
improvements and
restoration projects
are working toward
the same end -
improved water
quality
,P,
Contact:
Bob Monsarrat
Ohio EPA
614-644-3655
With funding through the
USEPA's Office of Water, Clean
Water State Revolving Fund
(CWSRF) loan program, the Ohio
EPA has worked to fund both point
and nonpoint source projects through
a newly developed Water Resource
Restoration Sponsor Program
(WRRSP). As a result of this
innovative program, communities in
Ohio have used $24 million of
CWSRF loan funds to protect and
restore 1,850 acres of riparian lands
and wetlands and 38 miles of Ohio's
stream corridors in the last two years.
The WRRSP offers communities very
low interest rates on loans for
wastewater treatment plant
improvements if the communities
also sponsor projects that protect or
restore water resources.
Although Ohio has addressed many
of its worst water quality problems,
the state's best available data indicate
that nonpoint source runoff, habitat
degradation, and watershed
disturbances are impeding future
improvements and threatening past
successes. In response, Ohio designed
the WRRSP to help prevent the loss of
biological diversity and ecological
health. To date, the WRRSP has
supported projects that have acquired
wetlands and riparian lands, acquired
conservation easements, restored
habitat, and modified dams. The
WRRSP restoration plans ensure that
projects undertaken result in protection
or restoration of valuable watershed
resources.
Linking Wastewater Treatment with
Water Resource Restoration
To participate in the Water Resource
Restoration Sponsor Program, a
community applies to the CWSRF
program for a loan to support
wastewater treatment system
improvements and also for WRRSP
assistance for water resource restoration
activities. If the CWSRF program
determines that the restoration action
meets program eligibility criteria of
either fully restoring or protecting water
resources already attaining their
designated uses, and the water resource
project ranks in the fundable range on a
priority list of restoration projects, the
CWSRF provides financial support for
both projects. To reward the community
for sponsoring the restoration project,
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; Clean Water
State Revolving Fund
After reviewing
cashflow
projections
completed by a
financial advisor,
Ohio has decided to
allocate $15 million
to the Water
Resource
Restoration
Sponsor Program
each year
the CWSRF reduces the community's
interest rate on the total borrowed for
both projects so that repayments are
slightly lower than they would have
been with a standard CWSRF loan for
only the wastewater treatment project.
However, the interest rate on the total
loan is always greater than zero percent.
A community that participates in the
WRRSP does not typically implement a
restoration project itself. A community
typically enters into a sponsorship
agreement with an implementing
partner, such as a land trust or a park
district, that develops and implements a
habitat protection and restoration plan.
ACTIVITY
UPDATE
The sponsorship agreement requires
that the implementing partner develop
and implement this plan to permanently
and fully restore watershed resources,
but it does not require the implementing
partner to make any repayments on the
CWSRF loan. The sponsoring
community makes all repayments to the
CWSRF (Fig. 1).
Communities in Ohio that take
advantage of the WRRSP recognize that
wastewater treatment system
improvements and restoration projects
are working toward the same end-
improved water quality. By considering
water quality problems in an integrated
Ohio's Water Resource
Restoration Sponsor Program
Community and
implementing partner
enter into sponsorship
agreement
CWSRF provides funding to
community for wastewater
treatment and restoration
projects
CWSRF
©
Community
Sponsor
Restoration Project
Implementing Partner
Community provides
CWSRF funding for
sponsored restoration
project
Community repays
low-interest loan
to CWSRF
Figure 1. Ohio's Water Resource Restoration Sponsor Program
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ACTIVITY
UPDATE
; Clean Water
State Revolving Fund
How Does Ohio Set Interest Rates for a Joint Project?
Example: $1 million for a wastewater treatment project and
$393,442 for a resoration project
1) Given: If this community did not participate in the WRRSP program, the $1,000,000 wastewater
treatment project would receive a 3.8% loan. This scenario would result in a total loan repayment amount
of $1,436,707 over the course of the repayment term.
2) However, if the community undertakes both projects, $1,000,000 for the wastewater treatment project
and $393,442 for the restoration project, the CWSRF could reduce the interest rate to 0.3% so the
community would suffer no hardship and still repay only $1,436,707 over the course of the loan repayment
term.
3) However, the CWSRF provides still further incentive by reducing the community's interest rate from
0.3% to 0.2%.
4) In this scenario, the community completes a wastewater treatment project, supports a watershed
restoration project, and saves $14,514.
fashion, communities will be better able
to address the water quality problems of
the future.
Monitoring the Program's Impact on
CWSRF Funding Capacity
Since the Water Resource Restoration
Sponsor Program offers loans with
interest rates as low as 0.2 percent, the
lack of interest earnings affects the
future funding capacity of Ohio's
CWSRF program. CWSRF program
management has considered these
impacts. After reviewing cash flow
projections completed by a financial
advisor, Ohio has decided to allocate
$15 million (about 7.5 percent of the
funds available for 2002) to the Water
Resource Restoration Sponsor Program
each year. The CWSRF program will
develop new cash flow projections each
year to reassess the impact of WRRSP
assistance on funding capacity.
A Precursor of the Future?
Ohio's Water Resource Restoration
Sponsor Program reinforces the idea
that wastewater treatment plant
improvements and water resource
restoration projects are complementary
efforts. Although strongly induced by
the state, communities that participate in
the WRRSP program provide the first
examples of how wastewater user fees
can support water resource restoration
projects. In the future, other
communities around the country may
consider this model as they search for
funding sources for a wide variety of
water quality projects.
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For more information about the Clean Water Revolving Fund, or for a program representative in your State,
please contact:
Clean Water State Revolving Fund Branch
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
Clean Water
State Revolving Fund
Office of Water June 2002 EPA 832-F-02-001
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