August 27, 2003
Honorable Marianne L. Horinko
Acting Administrator
U. S. Environmental Protection Agency
Washington, D.C. 20460-0001

Dear Acting Administrator Horinko:

      I am pleased to provide you with the Environmental Financial Advisory Board's latest
report, "Coordination ofUSEPA/SRF and USDA/RUS Water and Sewer Loan Assistance." The
development of this report was led by the Board's Public Finance Workgroup chaired by Sonia
Toledo of Lehman Brothers. In particular, the Board recognizes and thanks member John
McCarthy for his important contributions to the report. Mr. McCarthy is a Program Director with
the Northeastern Rural Community Assistance Program.

       This report examines the operations and interactions of the United States Environmental
Protection Agency (USEPA) Clean Water and Drinking Water State Revolving Loan Fund
Programs (SRFs) and the United States Department of Agriculture (USDA) Rural Utility Service
(RUS) Water and Environment Programs. All of these programs provide significant financial
assistance in the form of loans and/or grants for small rural communities to use in developing
water-related environmental infrastructure.

      In essence, the report looks at the issue of coordination between these programs and
considers whether improved coordination would result in more efficient use of federal resources
and improved environmental and public health protection.  The report includes recommendations
and next steps for USEPA to consider regarding the future interaction of these important federal
assistance efforts.  In this regard, the Board concludes that improved coordination is needed and
strongly recommends that USEPA commit to working with USDA to achieve closer cooperation
between the programs. The Board further recommends that these cooperative efforts focus on
integrating program priorities, coordinating interest rates charged for loan assistance, and
harmonizing their respective affordability standards.


       The Board hopes that the Agency will find the report and its suggestions constructive and
useful. It is prepared to discuss the findings and recommendations, and to take any follow-up
actions that are consistent with its charter. If you or your staff have questions regarding the report,
or would like to arrange a meeting, please let us know.  We greatly appreciate the opportunity to
serve the Agency.



                                         A. Stanley Meiburg
                                         Executive Director


cc:     Stephen L. Johnson, Acting Deputy Administrator
       G. Tracy Mehan, IE, Assistant Administrator for Water
       Linda M. Combs, Chief Financial Officer
       Michael W. S. Ryan, Deputy Chief Financial Officer
       Joseph L. Dillon, Comptroller


  Coordination of USEPA/SRF and USDA/RUS Water and Sewer Loan Assistance

Purpose of Paper

       This paper examines important programs overseen by the United States Environmental
Protection Agency (USEPA) and the United States Department of Agriculture (USD A) that
provide financial assistance to small rural communities to pay for water related environmental
infrastructure. The programs examined include:

•      the USEPA Clean Water and Drinking Water State Revolving Loan Fund Programs; and
•      the USDA Rural Utility Service Water and Environment Programs.

       The paper looks at the purposes of these programs and presents the eligibilities, amounts,
and types of assistance that they provide. The paper also looks at the issue of coordination
between the programs and considers whether improved coordination would result in better, more
efficient environmental and public health protection. The paper includes recommendations and
next steps for USEPA to consider regarding the future  interaction of these important federal
assistance programs.


       Both the USDA Rural Utilities Service (RUS) Water and Environment Programs (WEPs)
and the USEPA-funded, state-run Clean Water and Drinking Water State Revolving Funds
(SRFs) have successfully financed important numbers  of water infrastructure projects in rural
America. The RUS programs provide communities with a mix of loan and  grant assistance for
water and waste disposal projects, while the USEPA-funded SRFs make loans to communities
for wastewater and drinking water projects.

       RUS WEPs target loans and grants to small, lower income, rural communities with
populations under 10,000. While the state-run SRFs are not limited to this target group, many of
the environmental and public health threats that the SRFs seek to eliminate  occur in this same
target group. As a result, it is not uncommon for both  funding entities to consider offers of
financial assistance to the same communities.

       Given the extent of the financial need in many rural areas and the difficulty of meeting
that need, this overlap is fortunate. Many smaller communities, affected by diseconomies of
scale, experience compliance and capacity problems. This makes these small communities an
important target group for SRF program managers as well.

Funding Comparison

       Both the RUS WEPs and the EPA-funded SRF programs are important sources of federal
assistance for small communities.  A comparison of the financial resources of these programs
demonstrates significant  differences in how the Congress provides resources to them.  For
example, the RUS WEPs had $714,360,000 of budget authority for federal fiscal year 2001.
This funding amount included $594,265,000 designated for direct grants to communities and
$120,095,000 designated as loan subsidy. This loan subsidy amount was projected to create
$883,701,251 in direct project loans. Loan repayments are returned to the United States

       The funding mechanism for the SRF programs is quite different. During federal fiscal
year 2001, USEPA made capitalization grants to the State Revolving Funds of $825,000,000 for
Drinking Water and  $1,350,000,000 for Clean Water. These amounts were combined with other
SRF assets, including state matching funds, leveraging, funds from prior federal capitalization
grants, loan repayments and interest earnings. Using all of these combined assets, the Drinking
Water SRFs were able to make $1,315,100,000 of loans and the Clean Water SRFs were able to
make $3,846,300,000 of loans during the period July 1, 2000 to June 30, 2001. Loan repayments
are made to the state SRFs.

It should be noted that 22% of the DWSRF loans were made to communities under 3,300 and
12% of the CWSRF to communities under 3,500 (USEPA uses 3,500 for CWSRF).

       While funding for the RUS WEPs is smaller than the funds allocated to the two SRFs, its
significance is quite  large when one considers that they are targeted to serve the smallest, lowest-
income communities where needs have proved to be so great and so intractable. In fact, RUS
WEPs funding of communities with a population of less than 3,300 is significantly higher than
funding by the SRFs.

Subsidy Comparison

       While both the RUS WEPs and the EPA-funded SRF programs promote water
infrastructure improvements by providing subsidized loans, the subsidy mechanisms used by the
programs are quite different. As a result, the user costs can vary significantly depending on
which program provides the loan subsidy.  Virtually all RUS funding packages include some
amount of loan. In order to make projects affordable, however,  RUS also offers grants to many
eligible communities, in combination with their loans.

       At the time of the review, the RUS loan interest rate for poverty level communities was
4.5% nationwide. An RUS funding package can range from 100% market rate loan (at the time
of review, this rate was 5.5%) all the way to a maximum of 75% grant and 25% poverty rate loan
for some projects. However, most RUS loan/grant packages do not include 75% grants, because
there is insufficient grant money available.  Forty-year loan terms are common for RUS projects.

       Factors affecting the cost of money in the Clean Water and Drinking Water SRFs are the
rate of subsidy offered and the length of loan terms. Most SRF loan terms have been set at 20
years although loans made by some Drinking Water SRFs can now extend to 30 years. Unlike
the RUS programs, state SRF programs have the flexibility to set interest rates based on the state
priorities as outlined in their Intended Use Plans. In some states, the SRF interest rate has been
set as low as 0%. Principal forgiveness is also available for hardship communities participating
in the Drinking Water SRF Program. On the other end of the scale, the average weighted
interest rates offered by SRFs in some states are set at or close to market interest rates.

Coordination Efforts

       In most states throughout the nation there have been efforts at coordination between the
EPA-funded SRFs and USDA RUS WEPs. At the national  level, a 1997 Memorandum of
Understanding between EPA, USDA and HUD provided high-level official encouragement for
such coordination; however the results have been uneven at the state level.

       Coordination efforts have produced active cooperation in some states and resulted in
sharing of project priority lists, regular co-funding of projects and interim funding of RUS loans
by SRF loans. However, there are other states where coordination has not worked as well.
Although there are a number of factors that impact effective coordination, SRF interest rates,
which vary considerably among the states, may be the most important factor.

       In at least some states,  the managers of the RUS programs and the SRF programs have
found themselves competing at times for the same projects.  It is also not uncommon for
communities to apply to both programs in an effort to find the lowest cost.  This can result in a
duplication of administrative effort and in some instances, a loss by the state RUS programs of a
portion of its federal water subsidy. In some cases, in an effort to further reduce user costs, loans
from the SRF program are used to refinance loans from RUS, occasionally within just a few
months after the RUS loan is completed. In at least one Northeastern state, SRF funds went to
projects that could have been funded by the RUS, while  state RUS funds were returned unspent,
even though other state project priorities remained unfunded.

Important Coordination Issues

       A variety of factors influence coordination, but the cost of money is certainly among the
most important. In some states RUS WEPs funding is generally more affordable for small
communities to use. In these cases the SRF programs have difficulty competing with the RUS.
In other states, however, the opposite is true, and the RUS 4.5% loans, even when combined
with grants, cannot compete with a SRF loan carrying a very low rate of interest. In some cases,
lower rate SRF loans are being used to refinance the loan portion of RUS grant/loan packages in
an effort to raise subsidy to a level where the user rates become more affordable.

       The affordability of water and sewer rates is also at the center of issues affecting
coordination among infrastructure funding programs.  If a consensus on affordability could be

developed between the RUS programs and the SRF programs, it would be easier to speak about
desirable interest rates and partial grants for communities in particular environmental and
economic circumstances.

       Finally, RUS programs have a long history of capacity development and offer significant
resources to communities. They represent an important partner to EPA in overcoming capacity
problems in small and low income communities.  Better coordination could increase the value of
this partnership.

Program Goals: Differences and Opportunities

       EPA's goal is health protection while USDA's is rural development, resulting in different
program priorities and restrictions. For example, SRF funds may not be readily available for
system extensions intended to create economic development. There is still significant overlap
however, in the objectives of the two agencies. For instance, the capacity of rural communities
and their leaders to effectively plan and manage their water infrastructure over the long term is
essential to achieving the goals of both agencies.

       In addition to the RUS focus on some of the most difficult systems, RUS also brings an
important integrated development focus to their funding efforts in many states.  This is, in part,
because the RUS WEP represent only a fraction of the USDA Rural Development programs
available to small communities. USDA Rural Development programs also include a variety of
home ownership and multi-family housing programs, community facilities loans and a business
and industry grants program.

Because the RUS is one of a variety of community development programs offered by USDA, it
is in a position to support community  capacity development in a way that is just not possible for
USEPA or the state primacy agencies. This is important because many rural water systems are
in communities difficult to serve, economically non-viable, and geographically isolated. RUS
programs may offer the best potential  for creating economic and social capacity in some of these
communities.  Fostering a supportive working relationship with federal programs like RUS could
be a means for USEPA and the states to achieve their own compliance and health goals.

Recommendations Regarding EPA and USDA Cooperation

1.      EFAB recommends that USEPA pursue a national-level commitment from USDA/RUS
       to achieve closer coordination  between the SRF Programs and the RUS Water and
       Environmental Programs.

2.      EFAB recommends that USEPA invite USDA/RUS input on integrating small
       community water infrastructure funding into the broader planning and development
       concerns of rural areas. This would help to assure that the SRF program promotes other
       USEPA and community goals, such as smart growth, economic development and the
       building of strong, capable communities.

3.      EFAB recommends that USEPA work with USDA/RUS on setting WEP interest rates
       that mesh with SRF interest rates to achieve greater affordability for communities with
       the most need.

4.      To foster more efficient coordination between these two major federal water and
       wastewater loan programs EFAB recommends that USEPA include one or more experts
       from the state based RUS programs as members or expert witnesses to the EFAB board.

Additional Steps

•      A next step could be to seek case studies of RUS-SRF coordination from a number of
       states where this coordination has been either especially positive or particularly difficult.
       There may be states where coordination was at one time poor but has now improved;
       these should be included.

•      EFAB could seek a partner to survey SRF and RUS program managers in all fifty states
       to learn more about their perceptions of the need for improved coordination. This survey
       could be used to request input on measures that would strengthen collaboration.

•      EFAB could encourage SRF and RUS program managers to discuss and review their
       respective affordability standards with an eye to looking at how affordability can best be
       expressed and achieved. EFAB could offer to participate in these discussions.


                                                  PRL , -.„ , ION
                                WASHINGTON, D.C. 20460
                                            1 0  2003
                                                                              OFFICE OF
                                                                              - WATER ;
Mr. A. StanleyMeiburg                                                              '..1  .
Executive Director                                                            -•->    :: ,:i
Environmental Financial Advisory Board                                         —\    ^.;-T;..
61 Forsyth Street, SW                                                           "    ^   -
Atlanta, GA 30303                                                            '"'    '-•>   '
                                                                                   {,. >

Dear Mr. Meiburg:

       Thank you for your letter of October 14, 2003, to Acting Administrator Marianne Lamont
Horinko and the transmittal of the Environmental Financial Advisory Board's (EFAB) report
entitled, "Coordination of USEPA/SRF and USDA/RUS Water and Sewer Loan Assistance." I
support EFAB's interest in improving coordination between these financial assistance programs.
Below I offer my thoughts on each of your four recommendations.

       First, EFAB recommended that we pursue a national-level commitment from the Rural
Utility Service (RUS) to achieve closer coordination between the State Revolving Fund (SRF)
programs and the RUS Water and Environmental programs. Your recommendation comes at a
time when the Office of Water is undertaking unprecedented efforts to work with the United
States Department of Agriculture (USDA) on a number of water-related issues, including our
recent Combined Animal Feeding Operations (CAFO) rule and implementation of the Wetlands
Reserve Program and the Environmental Quality Incentives Program of the Farm Bill of 2002.
Two months ago, I sent a letter to  each state environmental director and agriculture
commissioner calling attention to the opportunities to address sources of pollution at agricultural
operations with both the Drinking Water and Clean Water State Revolving Fund. To follow up
on your recommendation to coordinate more closely with RUS, we will take another look at the
1997 Memorandum of Understanding with USDA and HUD signed by my predecessor
Bob Perciasepe. I have directed our Clean Water State Revolving Fund (CWSRF) Branch to
meet with the RUS to explore ways in which this memorandum might be reinvigorated.

       Second, EFAB  recommended that  we invite USDA/RUS input on integrating small
community water infrastructure funding into the  broader planning and development concerns of
rural areas. Our statutory authority on SRF funds is limited to supporting clean and safe water,
but we have encouraged states to integrate their SRF practices and policies with development and
planning and a number of states have led the way. Currently some 19 states have developed
"one-stop shopping" initiatives that steer applicants to the full range of funding options,
including RUS, available for water quality solutions.  The enclosed Activity Update of January
                              Intemef Address (URL) * http://www.epa.gov
            Recycled/Recyclable • Printed with Vegetable Oil Based Inks on Recycled Paper (Minimum 30% Postconsumer)

2003 provides more details on the one-stop shopping initiatives of Washington, Arizona and
Montana.  I am also pleased to report that our Clean Water State Revolving Fund Branch is
working with a network of water funding officials, including the Rural Utility Service, interested
in coordinating environmental infrastructure funding efforts. The "Small Community Water
Infrastructure Exchange" has financial support from the Council of Infrastructure Funding

       Third, EFAB recommended that we work with RUS on setting interest rates that mesh
with SRF interest rates. We will include interest rates as part of our discussions with RUS.
Briefly, CWSRF interest rates are determined by states and currently average 2.2 percent. RUS
interest rates are set by the Secretary of Agriculture. As you may know, recent market interest
rates have fallen below interest rates charged by RUS, but I understand USD A is internally
considering a proposal to fix this problem by setting the intermediate rate at 80 percent of the
market rate and  the poverty rate at 60 percent of market.

       Fourth, EFAB recommended that we include one or more experts from the state based
RUS programs as members or expert witnesses to the EFAB board.  As you know,  the Deputy
Administrator appoints members to EFAB. I would certainly support any decision of the Deputy
Administrator to appoint someone familiar with RUS to EFAB.

       Thank you again for calling my attention to another way to work with USD A to ensure
our joint success.  If you have any further questions, please feel free to  contact Sheila Frace,
Director, Municipal Support Division (202-564-0749).
                                         t Administrator

                                                            Clean Water
                                                            State Revolving Fund
  '^i PRO^^""
ACTIVITY    )ne-Stop Shopping in the Clean Water
UPDA TE   Revolving Fund Program
 States with

New Mexico
  New York
West Virginia
                     With more than $42 billion in assets
                     and continuing financial support
                 from USEPA, the Clean Water State
                 Revolving Fund (CWSRF) program is the
                 largest water quality funding program in
                 the country.  However, many other federal
                 and state assistance programs have similar
                 water quality or public health objectives.
                 For this reason, some state CWSRF
                 programs have worked with federal and
                 state financial assistance programs to
                 develop "one-stop shopping" initiatives
                 that provide one point of contact for water
                 quality improvement projects.

                 CWSRF programs have developed many
                 variations of the one-stop shopping
                 concept. Some states have developed
                 internet sites that help potential applicants
                 identify funding for which they are
                 eligible. Other states  have developed
                 funding committees that help applicants
                 identify which funding sources are most
                 applicable to their needs. Some stales
                 have developed application materials and
                 environmental review documents that can
                 be used for many  federal and state
                 assistance programs.  Finally, the most
                 integrated example of a one-stop
                 shopping program uses a single
                 application process for multiple programs.

                 One-stop shopping initiatives provide
                 many benefits:

                 •   Joint funding packages can provide
                    borrowers with greater amounts of
   funding, helping borrowers afford
   appropriate water quality solutions

•   Coordinated funding initiatives can
   help CWSRF programs support more
   projects and use more of their
   available loan funds

•   One-stop shopping programs ensure
   that assistance programs support
   projects that address a state's highest
   priority water quality problems and
   help eliminate competition with other

   Applicants find a one-stop shopping
   funding process to be easier and more
   convenient.  Projects are able to
   navigate the process quickly and
   move forward with project

*   Both the financial assistance
   programs and the applicants in one-
   stop shopping initiatives reduce
   administrative costs because water
   quality projects are directed to the
   most appropriate funding sources

This document highlights one-stop
shopping initiatives in Washington,
Arizona, and Montana.  Washington's
single application method is highly
efficient for applicants and  funding
programs, but the joint application only
serves three financial assistance programs.
Arizona's funding committee method

, Clean Water
    •  ;    .  •:, FuiiJ.
                                                              *    *  UPDATE
directs applicants to more than ten
financial assistance programs, but if a
project's most appropriate financing
solution involves funding from multiple
programs, the project has to complete
multiple applications.  Montana uses a
funding committee method similar to that
used by Arizona to direct applicants to
appropriate funding programs.  Montana
also developed a uniform application for
their programs, but the funding process for
each program remains separate.


The State of Washington coordinates loan
and grant funding from three water quality
programs - the Clean Water Slate
Revolving Fund loan program, the §319
Nonpoint Source Grants  program, and the
state's Centennial Clean Water Fund loan
and grant program.  Washington's
Department of Ecology manages all three
programs (www.infrafunding.vva.gov). In
state fiscal year 2002, these programs
supported SI07.0 million in water quality
projects (S80.4 million, $2.3 million, and
$25.1 million, respectively.)

Washington's water quality financial
assistance programs support projects
sponsored by Indian Tribes, state agencies,
local governments, and special districts.
Loans and grants have supported many
types of projects:

    Planning, design and construction
    of wastewater and storm water
    treatment facilities
•    Water reuse planning and facilities
•    Agricultural best management
•    Public boat pump-out construction
    Lake restoration
    Stream and salmon habitat
                                                             Wetland habitat acquisition
                                                             Wellhead protection
                                                             Watershed planning
                                                             Water quality monitoring
                                                             Public information and education
                                                                     Marina pump-out station
Joint funding process

Washington's Department of Ecology tries
to manage these three financial assistance
programs as one. The programs share one
funding cycle, one application form, and
one offer list. In each funding cycle, the
Department reviews all proposed projects
and places them on a priority-ordered offer
list.  If a project is in the futidable portion
of the offer list, the Department identifies
the most appropriate funding source for the

Washington's Department of Ecology
identifies the most appropriate funding
sourcc(s) for each project by considering
six questions:

•   Does the project have a revenue
   stream that could repay a loan?
•   How do project objectives match the

                                        .Clean Water
   slightly different objectives of the
   three funding programs?
•  How much assistance is each
   program offering this year?
•  Will the CWSRF program meet its
   goal of using 20 percent of its
   available resources for nonpoint
   source and estuary projects?
•  Have legislative budget provisos
   directed to the Department to award
   Centennial loans and grants to specific
•  Do project sponsors suffer financial
   hardships that would be alleviated
   with partial grant support?

Projects have one year to accept funding
       Restored wetland preserve
Source: Natural Resources Conservation Service
 Coordinated Information on the Internet and in Environmental Review

 Washington's Infrastructure Assistance Coordination Council (IACC) is a nonprofit
 organization that identifies ways of streamlining and coordinating the delivery of
 infrastructure-related financial and technical assistance to communities. This Council
 is composed of staff from state and federal agencies, nonprofit organizations, local
 government associations, and universities that provide assistance to local governments
 in Washington State. Two of the lACC's greatest successes have been the development
 of a web-based directory of assistance programs (www.infrafunding.wa.gov) and a
 standardized approach to environmental documentation for water and sewer

 The web-based directory of assistance programs allows potential assistance recipients
 to identify assistance programs for which they may be eligible. The directory sorts
 assistance programs by type of borrower, type of water quality project, type of
 assistance, and match requirements.

 The standardized approach to environmental documentation for water and sewer
 infrastructure adopted the most encompassing requirements of the National
 Environmental Policy Act, the State Environmental Policy Act, and the State
 Environmental Review Process. As a result of this coordination, communities are not
 required to complete multiple environmental review processes.

, Clean Water
 St;i!c Revolving Fiuul
                Integration of the funding programs

                Washington developed a joint application
                for the CWSRF loan program and the
                Centennial Fund loan and grant program as
                a pilot project in 1995. This joint
                application process received positive
                feedback from applicants, and the §319
                Nonpoint Source Grants  Program was added
                to the joint application in 1997. The
                funding programs required similar
                information and used similar evaluation
                                       methods—the joint application meets the
                                       needs of all three programs.  Washington
                                       further streamlined the programs by
                                       combining program guidelines.


                                       Arizona's Rural Water Infrastructure
                                       Committee (RWIC) is an informal
                                       partnership that works to improve the
                                       wastewater and drinking water
                                       infrastructure in Arizona.  This committee
A RWIC Success Story

The experience of Fredonia, Arizona provides a typical example of the packaging of
multiple funding sources through the efforts of the RWIC. Fredonia was one of the
first RWIC participants to participate in the project meeting process. Town officials
came to RWIC meetings several times over a period of 2 to 3 years to seek technical
and funding consultation and advice. The RWIC partners worked together and with
the town to develop a funding plan.

Fredonia is a small community located on the north rim of the Grand Canyon; it has a
population of just over 1100 people. When the town first came to the RWIC, it had
no sewer system and many of the septic tanks in the community were Jailing. In
addition, the local economy was declining because  its main logging industry had
closed. This situation was compounded by a low median household income.

The community decided to build a new sewer system with sewerage lagoons and also
came up with a plan to attract industry. Town leaders pursued an aggressive
campaign to fund the $3.9 million project.

With the assistance of the RWIC, the following funding was procured for the sewer
system and economic development:

US Dept. of Commerce Economic Development Administration Grant
(Industrial Park development)                       $1,035,900
US Dept. of Agriculture RD Grant                    $ 1,000,000
US Dept of Agriculture RD Loan                    $ 828,200
Local Funding                                    $ 232,500
WIFA Hardship grant                              $ 150,000
WIFA CWSRF Loan                               $ 660.120

                                                                                   Clean Water
                                                                                   Stale Revolving Fund
of federal, state, local, and private sector
organizations meets regularly to coordinate
financial and technical assistance. RWIC
partners include the following groups:

Arizona Commission of Indian  Affairs
Arizona Corporation Commission
Arizona Department of Emergency
Arizona Department of Environmental
Arizona Department of Commerce
Arizona Department of Water Resources
Arizona State Environmental Training and
  Technology Center
Arizona Small Town Environment Program
Arizona Small Utilities Association
Arizona Water and Pollution Control
Border Environment Cooperation
Greater Arizona Development Authority
  Intertribal Council
North American Development Bank
Rural Community Assistance Corporation
U.S. Department of Agriculture, Rural
          Wastewater treatment plant
   Source: Natural Resources Conservation Service
                                        U.S. Department of Commerce,
                                          Economic Development Administration
                                        U.S. Department of Housing and Urban
                                        U.S. Department of Interior, Bureau of
                                        Water Infrastructure Finance Authority of
                                          Arizona (includes Clean Water State
                                          Revolving Fund and Drinking Water
                                          State Revolving Fund)

                                        The RWIC meeting process

                                        Arizona's Rural Water Infrastructure
                                        Committee has considered projects from
                                        almost every rural community in the state
                                        within its structured format. Each project
                                        sponsor spends 75 minutes discussing its
                                        project with the committee. The sponsor
                                        first describes its situation and its proposed
                                        project. The committee then offers
                                        technical advice and recommends further
                                        sources of technical and financial support
                                        for the project. At the end of each meeting,
                                        the chair of the Rural Infrastructure
                                        Committee summarizes the discussion and
                                        recommended "next steps" for the project.

                                        The RWIC most often suggests that
                                        communities constructing wastewater
                                        treatment projects apply for funding from
                                        the Water Infrastructure Financing
                                        Authority of Arizona (CWSRF) or the U.S.
                                        Department of Agriculture (Rural
                                        Development Program).  To a lesser extent,
                                        other partners, including the Greater
                                        Arizona Development Authority, the
                                        Economic Development Administration,
                                        the North American Development Bank,
                                        the Department of Housing and Urban
                                        Development, and the Arizona Department
                                        of Emergency Management also support
                                        construction projects. Technical assistance
                                        is provided by many sources, as well. The
                                        RWIC identifies financial assistance

.Clean Water
                                                                 '  UPDATE
programs that are most appropriate for
each proposed project, and it offers advice
on how to develop a funding package that
coordinates multiple funding sources.

Development of the RWIC

The Rural Water Infrastructure Committee
formed in 1990 as an informal
organization of state and federal funding
programs. Committee participants
discussed how they could best meet the
infrastructure needs of rural communities,
and the funding programs implemented
many of the committee's ideas. The
committee first hosted project-oriented
meetings in 1994, and this format
blossomed in 1996 when funding
programs increased their participation in
RWIC activities. Since 1996, RWIC
meetings have assisted almost every rural
jurisdiction in Arizona and more than 200

                                                        Montana's Water, Wastewatcr, and Solid
                                                        Waste Action Coordinating Team
                                                        (W2ASACT) is a group of state, federal,
                                                        and nonprofit organizations that provides
                                                        financial and technical assistance to
                                                        communities and to water and sewer
                                                        districts.  The following five organizations
                                                        coordinate six funding programs (including
                                                        the CWSRF) through their participation in

                                                        Montana Board of Investments
                                                        Montana Department of Commerce
                                                        Montana Department of Environmental
                                                        Montana Department of Natural Resources
                                                         and Conservation
                                                        U.S. Department of Agriculture

                                                        W2ASACT meets on a bimonthly basis to
                                                        coordinate program efforts, and
                                                        subcommittees pursue program
                                                        improvements between meetings. A series
                                                        of workshops around the state in the spring
                                                        and the fall allow W2 AS ACT programs to
                                                        provide face-to-face advice and assistance
                                                        to communities as they develop and finance
                                                        water, wastewater,  and solid waste
                                                        infrastructure projects.  These workshops
                                                        tej **s
                                       Montana W2ASACT workshop participants

                                              can Water
                                                                                    Slate I
steer projects to appropriate sources of
funding and help them complete the
application process.

W2ASACT has also developed a uniform
application form, environmental
checklist, and preliminary engineering
report that is accepted by the six federal
and state funding programs.  While the
application process remains separate for
each funding program, and while each
program does require some
supplementary information, the uniform
materials reduce the lime, effort, and
expense that local governments incur
when they apply to multiple agencies for
financial assistance.

Development of W'ASACT and
uniform application materials

W2ASACT was created in 1983 as a
forum for water and wastewater
financing professionals in Montana.
This coordinating team was created in
response to new state-funded grant
programs for infrastructure financing. In
the early years of W2ASACT's existence,
this forum discussed the progress of
local infrastructure projects, especially
problem projects where local
governments were struggling.
W2ASACT has hosted workshops for
local governments since its creation in
1983, but in 1990 W2ASACT agencies
expanded their outreach and hosted
workshops in three or four communities
across the state.

In 1995, W2ASACT developed a
common preliminary engineering report
format that was acceptable to each of the
agencies that fund  water, wastewater,
and solid waste projects in Montana.
Spurred by this success, some of the
state agencies also adopted a common
application summary form and
environmental checklist that same year. In
1997, W2ASACT members adopted a
uniform publication that contains a
common application form, environmental
checklist and preliminary  engineering
report. C'ritical to these efforts was the
identification  of the core information that
musl be provided for all projects that
receive assistance from any of these
funding sources.
Contact Information

Suzanne Price
Arizona Water Infrastructure Finance
ph: 602-230-9770x217

John Tubbs
Montana Department of Natural Resources
and Conservation
ph: 406-444-6689

Brian Howard
Washington Department of Ecology
brh0461 ($ecy. wa.gov

                                                             v   :;  '.
  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                            January 2003                        EPA 832-F-03-001