Clean Water
Stale Revolving Fund
FACT Green Infrastructure Approaches to Managing Wet
SHEET Weather with Clean Water State Revolving Funds
This fact sheet identifies several ways in which
states, communities, and individuals can use the
Clean Water State Revolving Fund (CWSRF) to
finance green infrastructure projects. A general
overview of green infrastructure and the
CWSRF program are provided, as well as case
studies highlighting specific projects from
across the country.
What is green infrastructure?
"Green infrastructure" is a relatively new and
flexible term that has been used in a variety of
contexts. For the purposes of this factsheet, the
term "green infrastructure" refers to systems and
practices that use or mimic natural processes to
infiltrate, evapotranspire (the return of water to
the atmosphere either through evaporation or
transpiration), or reuse stormwater. Examples
of green infrastructure approaches currently in
use include green roofs, trees and tree boxes,
rain gardens, vegetated swales, pocket wetlands,
infiltration planters, permeable pavements,
riparian buffers, and floodplains. Green
infrastructure also includes decentralized
harvesting approaches, such as the use of
cisterns to capture water for flushing toilets or
subsequent outdoor irrigation. These
approaches reduce the amount of runoff
discharging to surface waters and keep
rainwater out of our sewer systems so it does
not contribute to sewer overflows.
What are additional benefits of green
infrastructure?
In addition to reducing the overall volume of
stormwater runoff and the frequency of sewer
overflows, green infrastructure can help
communities enjoy a number of additional
environmental and economic benefits,
including:
• Cleaner Water
• Enhanced Water Supplies
• Cleaner Air
• Reduced Urban Temperatures
• Climate Change Benefits
• Increased Energy Efficiency
• Source Water Protection
• Community Benefits
• Cost Savings
Vegetated swales capture and infiltrate runoff along
this "green street" in Portland, Oregon.
These benefits make green stormwater
development an attractive option for towns and
cities looking to upgrade their infrastructure
systems. Nevertheless, many local governments
lack the financial resources needed to
implement green infrastructure projects in their
communities. This is where the CWSRF can
help.
more about the benefits of green infrastructure at: www.epa.gov.npdes/greeninfrastructu
re
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Clean Water
Stcile Revolving Fund
What is the Clean Water State Revolving
Fund?
The CWSRF is a powerful financing program
that provides loan assistance for wastewater
treatment, stormwater management, nonpoint
source abatement and estuary protection
projects. Today, all 50 states plus Puerto Rico
operate successful CWSRF programs that have
provided over $68 billion in financial assistance
since 1988. This funding is provided in the
form of low interest loans at an average of 30%
below market rate. In 2007 alone, the CWSRF
financed $5.3 billion in national water quality
projects. At present, only a small percentage of
the CWSRF has financed green infrastructure.
However, as demand for green infrastructure
projects increase, we expect CWSRF funding to
be used more.
Downspouts that are not connected to the sewer system
allow stormwater to be absorbed into landscaped areas.
• Framework of CWSRF - CWSRF programs
are capitalized with a grant from the EPA,
plus a 20% match from the state. The
revolving nature of the program is
perpetuated with loan repayments, interest,
and federal capitalization grants that are
used to fund new projects.
FACT
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What are the benefits of using Clean Water
State Revolving Funds?
The CWSRF is an attractive financing option
for several reasons. For one, CWSRF money is
readily available and can be used for a wide
variety of projects. State managers of the
CWSRF program are very innovative and can
often leverage available resources to meet
fluctuating demands.
Federal
' ^\ ' Capitalization Provides
0 ' Initial Funding
States Match
Federal Capitalization
Grants (20 percent of
federal capitalization)
Bond Haiders
Provide Additional Funding
Affordable Funding Although CWSRF
money is not free, it is affordable. CWSRF
loans can have interest rates as low as 0%,
and cover up to 100% of a project's costs
with no matching requirement on behalf of
the borrower. This is different from a grant,
which typically requires the grantee to
provide matching funds that must be
available at the start of a project. In some
cases, the savings accumulated with a
CWSRF loan are comparable to a partial
grant.
Flexible Repayment Options - States have
flexibility to set interest rates and repayment
terms. Loans are usually paid off over 20
years or the useful life of the project - which
ever is less - with repayment commencing
within one year of project completion. In
many cases, funds to repay CWSRF loans
are generated by the project itself or from
unrelated revenue sources. Some examples
of repayment sources are listed below.
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FACT
SHEET
Clean Water
State Revolving Fund
• "Flush" Fees
• Stormwater Fees
• Homeowner Fees
• Recreational or License Fees
• Dedicated Portion of State, County,
Town, or Special District Fees or Taxes
• Community General Obligation Bond
Authority
• Donations or Membership Dues made to
Nonprofit Organizations
• Individual or Business Revenues
Helpful Hint: EPA has developed several useful
tools for evaluating a wide range of project
financing options, including:
EPA's Financial Assistance Comparison Tool
(FACT), available at:
www.epa.gov/owm/cwfinance/cwsrf/fact.htm
EPA's Guidebook of Financial Tools,
available at:
www.epa.gov/efinpage/guidebook.htm
EPA's Overview of Green Infrastructure,
available at
www.epa.gov/npdes/greeninfrastructure
Is my green infrastructure project eligible for
Clean Water State Revolving Funds?
The CWSRF has broad authority to fund
watershed projects directly related to (1)
Publicly Owned Treatment Plants (POTWs), (2)
states' Nonpoint Source Management Plans, and
(3) the National Estuaries' Comprehensive
Conservation Management Plans (CCMP).
Green infrastructure projects located within a
community that is regulated under the National
Pollutant Discharge Elimination System
(NPDES) Stormwater program must abide by
NPDES requirements.
• Permitted Communities - If a community is
permitted for Stormwater, it is considered a
point source, and therefore projects may be
funded as POTWs. These types of projects
must be publicly owned. If a community is
permitted and the project is not specifically
required by a draft or final NPDES permit, it
may be funded as a nonpoint source project
if it is consistent with a state's Nonpoint
Source Management Plan. Nonpoint source
projects may be publicly or privately owned.
• Non-Permitted Communities If a
community does not have a draft or final
NPDES Stormwater permit or is exempt
from permitting, the project may be funded
as a nonpoint source project under a state's
Nonpoint Source Management Plan and can
include publicly or privately owned projects.
Additionally, any public or private project
may be funded as an estuary project if the
project is located in a National Estuary
Program's watershed and is sanctioned by
the estuary's CCMP.
What kinds of green infrastructure projects
can the CWSRF pay for?
• Eligible Projects - The CWSRF can fund
the "capital costs" of water quality
improvement. Capital costs include
traditional infrastructure expenditures (such
as pipes, pumps and treatment plants), as
well as unconventional infrastructure costs
(like land conservation, tree plantings,
equipment purchases, planning and design,
environmental cleanups and even the
development and initial delivery of
environmental education programs). One of
the few things the CWSRF cannot fund is
the operation and maintenance costs of a
project (i.e. mowing the grass in an urban
park or paying operator salaries). Grey
Stormwater infrastructure, such as traditional
pipes and pumps, continue to be eligible for
CWSRF assistance. Grey infrastructure can
be improved and upgraded by implementing
green infrastructure development, such as:
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Clean Water
Revolving I'liiul
Tree Boxes
Vegetated Swales
Vegetated Median Strips
Cisterns & Rain Barrels
Land Conservation &
Reforestation
Downspout
Disconnections
Green Roofs
Riparian Buffers
Parks & Greenways
Permeable Pavements
Wetland & Floodplain
Construction
Rain Gardens &
Bioinfiltration Practices
Assurances -- The CWSRF can also help
reduce risks associated with the performance
of green infrastructure practices. Some
communities may be reluctant to try these
relatively new storm water management
technologies because of concerns that they
may fail to perform as expected.
Fortunately, there is a simple way to ease
these concerns. States may charge
additional fees on their CWSRF loans,
known as non-program income, which can
be used for a wide range of purposes. Using
this additional source of income, states can
pay for insurance that cover the risk
associated with the performance of newer
green technologies. If there is sufficient
non-program income, states can also use the
funds to replace a particular technology that
fails to perform adequately. The practice of
providing assurances is not widely utilized
by states. Contact your state for more
information.
Helpful Hint: By incorporating green infrastructure
into traditional storm water infrastructure projects,
POTWs can use CWSRF funds to pay for land
acquisitions in public right-of-ways that would not
otherwise be authorized. Here is how:
Under current regulations, POTWs cannot receive
CWSRF funding for land, including right-of-ways,
unless that land is integral to the wastewater treatment
process. However, percolation of stormwater through
the soil matrix is often essential to the operation of
green infrastructure practices, many of which can be
conveniently located in public right-of-ways. Thus,
because green infrastructure practices can utilize the
soils and plants in a right-of-way to clean and infiltrate
stormwater, the land in that right-of-way becomes
integral to the treatment process and is therefore eligible
for CWSRF funding.
FACT
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How have other communities used the
CWSRF to finance green infrastructure
projects?
A growing number of communities are now
using the CWSRF to pay for green
infrastructure projects that improve water
quality while providing additional economic and
environmental benefits. The following case
studies provide examples of the ways in which
the CWSRF has been used to facilitate green
infrastructure implementation.
• Seattle Plans Redevelopment while
Protecting Salmon - Seattle Public Utility's
High Point project will use a 20 year, 1.5%
CWSRF loan of $2,715,000 to install
innovative natural drainage elements, such
as bioswales, compost-amended soil
reservoirs, and porous pavement. These
green infrastructure additions have been
designed to improve stormwater
management in the 303(d) listed
Longfellow Creek Watershed, an important
watershed for spawning salmon. The 120-
acre redevelopment plan for low-income
communities is along one of Seattle's most
important urban creeks. Upon completion
of the project, 10% of the Longfellow
Creek watershed will be restored to
drainage conditions comparable to rural
pastures. The development project has
been designed to provide significant
benefits to water quality, wet weather flow
reduction, habitat protection, and public
outreach and education in the 34 block
community.
• Cohasset, Massachusetts Wins 2006 Smart
Growth Award - The Town of Cohasset,
Massachusetts used a $479,500 CWSRF
loan with a 2% interest rate to retrofit its
stormwater drainage system to implement
recommendations identified in the Drinking
Water SRF funded Source Water Protection
Plan. This two-year project included the
construction of more than 40 rain gardens
and several vegetated swales to reduce the
amount of runoff entering the town's
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FACT
SHEET
stormwater collection system. The rain
gardens were strategically placed within
township right-of-ways and are designed to
capture the first 0.9 inches of rain during wet
weather events. A winner of the 2006
Massachusetts Smart Growth Award, the
project provides an excellent example of
how low-cost and low-maintenance green
infrastructure techniques can improve
stormwater quality and protect drinking
water sources.
Curb-less roadside, equipped with stormwater
drainage system in Cohasset, Mass.
• Rockville, Maryland Wins PISCES Award
for Restoration Efforts - The city of
Rockville, Maryland obtained a $14 million,
0% interest CWSRF loan to fund the
planning, design, and restoration of the main
stem of Watts Branch, a tributary of the
Potomac River. The project included
enhancements to existing wetlands,
restoration of stream buffers, stabilization of
4,000 feet of eroding stream bank and
upgrades to storm drain outfalls. These
improvements were designed to enhance
aquatic habitat and reduce pollution from
stormwater runoff in the Chesapeake Bay.
Funds to repay the loan will be generated
from Rockville's stormwater fee. In
recognition of the project's success, the
Maryland Department of Environment
selected Rockville to receive EPA's 2006
PICSES Award, which is presented to
communities that most effectively and
Clean Water
State Revolving Fund
efficiently use funding from EPA's CWSRF
program.
• West Jefferson, Ohio Protects Aquatic
Ecosystems with CWSRF - The Ohio
CWSRF program has provided over $1.1
million in low interest rate loans to Hidden
Creek Ltd to fund a variety of projects that
protect the Big Darby Creek watershed -
one of the highest quality warm-water
aquatic ecosystems in the United States.
Environmentalists became concerned when
a large tract of highly erodible agricultural
land within the Big Darby watershed went
up for sale and was expected to be bought
by a developer. Fortunately, a
conservationist-owned company, Hidden
Creek Ltd, bought the property with
financial assistance from the CWSRF.
Hidden Creek Ltd then designed a housing
project to demonstrate that development can
be both environmentally sensitive and
financially profitable. With the help of
CWSRF funds, a comprehensive set of
actions were taken to limit the amount of
runoff generated from the development
project. This included the construction of
vegetated swales, restoration of the wooded
stream corridor, and the establishment of
emergent wetland habitat. In addition, 230
acres of the riparian stream corridor have
been protected via a conservation easement
held by the Natural Resources Conservation
Service. A program has also been developed
to educate homeowners and housing
contractors about watershed protection and
related deed restrictions attached to each
property. This project was intended to serve
as a model for future development in the
watershed. Hidden Creek Ltd has since
received a national wetland award for land
stewardship and development from the
Environmental Law Institute, and has repaid
the CWSRF loans with revenues from the
sale of the housing lots.
• San Francisco, California Protects 10,000
Acres with CWSRF - In 2004, the Nature
Conservancy used a $9 million CWSRF loan
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Clean Water
State Revolving Fund
to fund the interim financing and holding of
a critical portion of land, known as the Palo
Corona Ranch, in Monterey Country. The
Palo Corona Ranch is largely considered the
gateway to California's Big Sure coastline.
This project protected 9,898 acres of pristine
Redwood and Monterey Pine forests from
imminent development. Without the Nature
Conservancy's purchase increased
sedimentation and stormwater runoff would
have cause severe impaired to coastal and
aquatic resources. The property will be
retained by the Department of Parks and the
Monterey Peninsula Recreational Park
District with dedicated funds over a seven
year period.
Easement in Monterey Co., CA protects
aquatic resources.
• Port Townsend, Washington Manages
Stormwater with Wetlands Protection - The
City of Port Townsend, Washington was
able to meet several stormwater management
and wetlands preservation objectives by
obtaining a $400,000 loan at 0% interest
from Washington State's CWSRF to
purchase an area known as the Winona
Wetlands. This wetland provides critical
For more information, contact
U.S. Environmental Protection Agency
1201 Constitution Avenue, NW (Mail code 4204M)
Washington, DC 20460
Phone: (202) 564-1029 Fax: (202)501-2403
www.epa.gov/OW-OWM.html/cwfmance/cwsrf
FACT
9999 SHEET
stormwater attenuation for the area and
maintains valuable habitat for local wildlife.
Potential development of the area not only
threatened the wetlands, but would also
result in significant stormwater management
problems. The city purchased the 6.5 acres
in Phase I of the project and an additional 9
acres in Phase II. The loans were
completely paid back within 5 years with a
portion of the city's new $5 per household
stormwater utility fee.
The valuable wildlife in the Winona Wetlands of
Washington are protected with $400,000 loan.
Helpful Hint: Here are several ways you can work
with your state CWSRF:
• Help your state CWSRF managers document the
relationship between stormwater and water
quality.
• Comment on the CWSRF Annual Intended Use
Plan: provide written comments and attend public
hearings.
• Be a Broker: bring stormwater capital projects to
the CWSRF and bring the CWSRF to the
stormwater community.
• Think creatively about how to target CWSRF
funds at stormwater projects, e.g., loan terms,
marketing, dedicated pots of money.
Clean Water
State Revolving Fund
Office of Water
July 2008
EPA832-F-08-001
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