CLEAN WATER
         STATE REVOLVING
       I  FUND PROGRAMS
A stronger nation through cleaner water
   a stronger economy through sustainable investments
&EPA

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CWSRF Program  Highlights:


   • $74 BILLION IN CUMULATIVE ASSISTANCE PROVIDED1

   • 1.4 TO 2 MILLION JOBS CREATED SINCE 19882

   • 69 PERCENT OF ASSISTANCE GOES TO PROJECTS THAT PROTECT HUMAN HEALTH3

   • OVER 130 MILLION PEOPLE LIVING IN MORE THAN 2,500
     COMMUNITIES HAVE BENEFITED FROM THE CWSRF3

   • AVERAGE SAVINGS OF 22 PERCENT OF TOTAL PROJECT COSTS FOR A 20-YEAR LOAN1

   • FUND UTILIZATION RATE OF 96 PERCENT1

   • 2.53 TIMES CUMULATIVE RETURN ON FEDERAL INVESTMENT1
1EPA CWSRF National Information Management System
Calculated based on assistance provided to date. Source: Clean Water Council. June 2009. Sudden Impact: An
Assessment of Short-Term Economic Impacts of Water and Wastewater Construction Projects in the United States.
Available at: http://www.nuca.com/files/public/CWC_Sudden_lmpact_Report_FINAL.pdf
3CWSRF Benefits Reporting System

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TABLE OF CONTENTS
THE CLEAN WATER STATE REVOLVING FUND:
A STRONGER NATION THROUGH CLEANER WATER,
A STRONGER ECONOMY THROUGH SUSTAINABLE INVESTMENTS
IMPLEMENTING THE AMERICAN RECOVERY AND REINVESTMENT ACT
CASE STUDIES OF SUCCESSFUL STATE IMPLEMENTATION OF ARRA
CWSRF 2009 PERFORMANCE HIGHLIGHTS
13
STATE AGENCIES AND EPA REGIONAL OFFICES
THAT MANAGE CWSRF PROGRAMS
18
PISCES AWARDS:
RECOGNIZING EXCEPTIONAL STATE CWSRF ACCOMPLISHMENTS
21
2009 FINANCIAL PERFORMANCE OVERVIEW
24
CWSRF INITIATIVES FOR FY 2010
29
CWSRF AT-A-GLANCE
32
                            2009 ANNUAL REPORT

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The Clean Water State Revolving  Fund: A
Stronger Nation Through Cleaner Water,
A Stronger Economy Through  Sustainable
Investments
Our nation has a long history of providing fund-
ing to protect and restore our local waterways.
Since the mid-20th century, billions  of dollars
have been invested through federal construc-
tion grants and other programs for the con-
struction of wastewater treatment facilities.
In the  1980s, Congress reaffirmed its commit-
ment to ensuring clean water for all Americans
by authorizing the Clean Water State Revolv-
ing Fund (CWSRF) through the Clean  Water Act
Amendments of 1987.  This groundbreaking
program provides communities with low-cost
funds for infrastructure construction and other
activities to restore and protect our waterways.
The unparalleled success of the CWSRF was
further demonstrated in Congress's decision
to appropriate $4 billion to the CWSRF in the
American Recovery and Reinvestment Act of
2009 (ARRA) in February. The ARRA funds, in
addition to the CWSRF's base program financ-
ing, are  helping to create  and  sustain thou-
sands of jobs and further improve the condi-
tions of our waters for public health, recreation
and wildlife.

Since the first project received CWSRF financ-
ing  in  1988, the  program has provided  over
$74 billion  in assistance for eligible wastewa-
ter infrastructure, nonpoint source and estuary
projects. By the end of Fiscal Year (FY) 2009,4
states  had  entered  into almost 24,700 assis-
tance agreements.  Because the CWSRF pro-
vides financing at below market interest rates,
thousands of communities and other eligible
entities have been able to upgrade and replace
their wastewater treatment plants, correct
combined and sanitary sewer overflows, and
prevent  contaminated  runoff from  entering
waterways  at a much lower cost than  they
would  have  incurred through conventional
financing.
1 The 2009 Fiscal Year covers the period from July 1, 2008 through June 30, 2009.
                    CLEAN WATER STATE REVOLVING FUND PROGRAMS

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  FIGURE 1: HOW THE CWSRF PROGRAM WORKS
                          STATE GOVERNMENT
           BOND
         HOLDERS
                                State
                                Match
,  CLEAN WATER
STATE REVOLVING
     FUND
ASSISTANCE
RECIPIENTS
01
E 
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  FIGURE 2: CWSRFS RETURN 2.53 TIMES THE FEDERAL INVESTMENT AS OF FY 2009

       CWSRF Disbursements
Federal Outlays
    Federal Outlays are the amount of cash drawn from the U.S. Treasury into the CWSRF.
    CWSRF Disbursements are the actual cash paid out from the CWSRF to assistance recipients
Twenty-seven  states  further  increase  their
financing  ability  by  issuing  bonds  secured
by their CWSRF  resources.  This makes  addi-
tional funds available to finance more projects.
These states have made an  additional $24 bil-
lion in financing available for projects to date.

Responsible fiscal management and the revolv-
ing nature of the CWSRF program have resulted
in a remarkable return on federal  investment.
As of FY 2009, for every federal dollar invested,
$2.53 in CWSRF assistance has been disbursed
to eligible wastewater and nonpoint source
projects across the country (Figure 2).

THE AMERICAN RECOVERY AND REINVESTMENT
ACT

The American Recovery and Reinvestment Act
of 2009 made a dramatic impact on CWSRF pro-
gram operations in FY 2009, and will continue
to do so through FY 2010. Signed by President
Obama on February 17,  2009, ARRA provided
$4 billion in capitalization to  the CWSRF in addi-
tion to the $689  million that had already been
appropriated for 2009. The Recovery Act's goal
of preserving and creating jobs produced new
challenges and opened up many new opportu-
nities for the CWSRF.
                 In order to get the funds to communities as
                 quickly as possible, Congress mandated that
                 all  of the  money be under contract or con-
                 struction within one year of enactment, with a
                 goal of having at least half of the funds  under
                 contract within 120 days.  In addition, at least
                 50 percent of the funds had to be provided in
                 the form of additional subsidization.  Congress
                 also  promoted  "green"  practices by  requir-
                 ing that 20 percent of the ARRA capitalization
                 go towards four categories of green projects.
                 Figure 3 outlines the primary requirements of
                 the ARRA funds.

                 In addition to highlighting the financial accom-
                 plishments from the last year, this report fea-
                 tures case studies  that emphasize the states'
                 ARRA successes through June 30, 2009.  It also
                 looks ahead towards FY 2010 and beyond, as
                 ARRA implementation continues  and  higher
                 capitalization grants and  new  Administration
                 initiatives  present new challenges and  oppor-
                 tunities for the CWSRF programs.
                      CLEAN WATER STATE REVOLVING FUND PROGRAMS

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FIGURE 3: 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 pro-
      vide additional subsidization,  such as grants,  principal forgiveness or negative
      interest rate loans.

      Green Project Reserve: At least 20 percent of ARRA funds must be used for four
      types of prejects-

      (1)      Green infrastructure,

      (2)      Water efficiency improvements,

      (3)      Energy efficiency improvements, and

      (4)      Environmentally innovative activities

      Buy American: All iron, steel and manufactured goods incorporated in 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.
         The ARRA funds, in
   addition to the CWSRF's
   base program financing,
 are  helping to create and
sustain thousands of jobs.
                            2009 ANNUAL REPORT

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Implementing the American  Recovery and
Reinvestment Act
The American Recovery and Reinvestment Act
of 2009 (ARRA) presented a unique challenge
to federal and state governments.  With over
20 years of successfully managing the CWSRF,
states were able to hit the ground running. In
fact, a number of states began reaching out to
communities to identify "shovel-ready"  proj-
ects several  months before the stimulus pack-
age passed.

As  the  House  of  Representatives  and  the
Senate passed their versions of the bills,  EPA
held online  webcasts, meetings, and confer-
ence calls with  state and Regional EPA CWSRF
staff to discuss how potential provisions might
be implemented.  EPA acted quickly when the
Recovery Act was  passed and signed  by the
President on February 17, 2009.  EPA published
the final ARRA  guidance less than two weeks
later,  on  March 2, allowing states  to  begin
implementing the provisions of ARRA with min-
imal delay.

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 receive in a year. In addition,
state CWSRF staff reached out proactively to
communities to inquire about  potential ARRA
projects.   State employees worked  through
thousands  of initial applications to prioritize
the projects based on economic impact, finan-
cial need,  environmental benefit  and adher-
ence to ARRA goals and requirements.

ADDITIONAL SUBSIDIZATION

ARRA  included  a number of  provisions that
were new  to the CWSRF; the  first being that
at least 50  percent of a state's ARRA allotment
was to be provided in the form of grants, princi-
pal forgiveness or negative interest rate loans.
These options all have  the effect of reduc-
ing the repayment amount or  eliminating the
project's CWSRF loan altogether. A number of
states, including Illinois and California, had to
pass emergency legislation to  allow them to
provide this type of financing.
                     CLEAN WATER STATE REVOLVING FUND PROGRAMS

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States have taken different approaches to the
additional subsidization provision.  For exam-
ple, Florida has limited additional subsidization
to disadvantaged communities and Colorado
has provided  additional subsidization to all of
its ARRA borrowers. The flexibility in the ARRA
legislation and the states'  long history of inno-
vation  allowed  them  to  devise subsidization
strategies that  best  met their communities'
needs.

GREEN PROJECT RESERVE

The  ARRA Green Project Reserve  called for
states to use  20 percent  of their ARRA allot-
ment for green infrastructure, water or energy
efficiency improvements or other  environmen-
tally innovative activities. These four categories
of projects are not new to CWSRF programs,
and  represent a subset of projects already eli-
gible for fund ing under federal rules. EPA devel-
oped guidance for the Green Project Reserve in
order to ensure  proper implementation of this
provision.

States  are using  the  Green Project Reserve
as an opportunity to reach out to additional
borrowers and  projects.   Many states  such
as Maryland, California  and  South  Carolina
are making efforts to reach  out  to  nonprofit
environmental organizations that had  never
utilized CWSRF  funds before.  The  Louisiana
CWSRF program met with stakeholders includ-
ing mayors, state representatives, the Louisi-
ana  Municipal Association and the  Louisiana
Police Jury Association to  make them aware of
the opportunities provided by ARRA funding.
Iowa formed  a  variety of partnerships  with
entities such  as county boards of health, soil
and water conservation districts, conservation
organizations  and farm groups to get the word
out about the availability of ARRA  funds and
to better coordinate funding efforts between
local and state agencies.
DAVIS-BACON AND BUY AMERICAN

The Recovery Act  also mandated the use of
Davis-Bacon federal prevailing wage rates and
American-made iron, steel and manufactured
goods for all projects funded wholly or partially
with ARRA funding.

These complex  provisions pose a number of
challenges  to state and federal  CWSRF staff
in their efforts to ensure that they are imple-
mented according to the law while minimizing
the administrative burden on project sponsors.
To help inform applicants, EPA and the  states
have  begun conducting  workshops  where
implementation of these provisions is a primary
topic. Iowa held one of the first of such work-
shops in May 2009. States have been actively
working to  develop procedures, checklists and
other guidance to help ensure that these provi-
sions are  being implemented correctly by both
the assistance recipients and the state CWSRF
program.

ARRA REPORTING

EPA, in  close collaboration  with the states,
launched the CWSRF Benefits Reporting System
(CBR) in 2005.  This tool, which  captures the
projected  water quality improvements asso-
ciated with  each CWSRF  project, was quickly
adopted by all state programs.  CBR  has also
become the primary tool for collecting data on
ARRA projects,  including  information  on jobs
created or  retained, contracts awarded, con-
                                  2009 ANNUAL REPORT

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struction dates, Green Project Reserve compo-
nents and additional subsidization.

EPA created an expanded section of CBR with
all of the  necessary ARRA reporting param-
eters, giving states a one-stop-shop for enter-
ing the environmental  benefits data for  their
ARRA and  base program projects as well as
ARRA-specific data  (Figure 4). The Office of
Management and Budget (OMB) published its
ARRA reporting guidance on June 22, and EPA
was able to  release the CBR ARRA  reporting
module approximately a week later. Using CBR,
the  CWSRF programs can  populate  the OMB
reporting template as well as produce reports
                                           required by Congress, eliminating the need for
                                           states to enter this information in several dif-
                                           ferent databases.   EPA is also using this data-
                                           base  to monitor states'  progress and provide
                                           updates to Congress and the Administration.

                                           EPA and the states continue to work every day
                                           toward ensuring that the CWSRF achieves all
                                           of the goals and requirements in the Recovery
                                           Act.  The states are coordinating with com-
                                           munities and project engineers to verify that
                                           they are meeting all of the ARRA requirements,
                                           while at the same time continuing their efforts
                                           to award their non-ARRA CWSRF funds to proj-
                                           ects in a timely manner.
  FIGURE 4: CWSRF BENEFITS REPORTING SYSTEM'S ARRA REPORTING PAGE
Ğ  -*ğ
 oĞ- o
                                      /a-*
      CWSRF Benefits Reoorti
                     CLEAN WATER STATE REVOLVING FUND PROGRAMS

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Case  Studies of Successful State Implementation

of ARRA


Early Planning Helps Maine Hit the Ground Running

Maine's CWSRF program began planning for the possibility of stimulus funding well before ARRA
was passed. The CWSRF, which is jointly administered by the Maine Department of Environmen-
tal Protection (DEP) and the Maine Municipal Bond Bank, began reaching out to communities and
consulting engineers as early as December 2008.

Based on this initial outreach to municipal licensed dischargers and consulting engineers, the DEP
received more than 200 project proposals from 90 entities totaling over $317 million. Maine was
allotted approximately $29.1 million in ARRA funds. The state developed ARRA project ranking
criteria that first prioritized projects based on  environmental benefits and then provided addi-
tional points for projects that could begin construction sooner.  For example, a project that could
begin construction in June 2009 would receive 31 percent additional points compared to a project
beginning construction in March 2010. The state also offered interest-free loans to all ARRA bor-
rowers plus principal forgiveness between 24 and 100 percent, based on user rate  affordability.

As a result of its efforts, Maine  had already signed six assistance agreements totaling $14.9 mil-
lion by June 30, 2009.

Innovative Programs and Partnerships Advance New York's
Green Project Reserve

The New York State Environmental Facilities Corporation (EFC) established a new program, the
Green Innovation Grant Program (GIGP), to help provide ARRA funding  to eligible  Green Project
Reserve projects. The EFC created a new category on its Intended Use  Plan (IUP)  for GIGP proj-
ects. New York's CWSRF program allocated more than $35 million to the GIGP. GIGP funds were
directed to eligible  Green Project Reserve projects that were not previously listed  on the state's
                               2009 ANNUAL REPORT

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IUP, and these projects had to go through  a
separate application process. Applications were
accepted through May 29, 2009.

Eligible GIGP applicants included municipalities,
state agencies, private and not-for-profit organi-
zations, school districts and water and conserva-
tion districts.  To evaluate applications, the EFC
considered criteria such as readiness to proceed
to construction, reduction in energy and  water
use, green energy production, water reuse, proj-
ect sustainability and innovation.

The EFC received 294 GIGP  project applications, which were reviewed by an interagency panel
that included representatives from the EFC, the New York State Department of Environmental
Conservation, the New York State Department of Health and the New York State Energy Research
and Development Authority. Projects  selected for GIGP funding will receive ARRA grants for up
to 90 percent of eligible costs, with the remaining ten percent being provided by local matching
funds.  Governor David A. Paterson praised the program and the response rate by saying, "The
Green Innovation Grant Program represents a  bold step in advancing the State's green economy.
I am pleased with the enthusiastic response to this important program, which will spur creative
innovations to help protect our  magnificent rivers,  lakes and streams, preserving clean water for
future generations."

To advance its goal of ensuring that all CWSRF projects be efficient in their use of energy, the
EFC also established  an innovative partnership with the New York State Energy Research  and
Development Authority (NYSERDA), which manages the New York State Regional Greenhouse Gas
Initiative. The partnership leveraged additional money for energy efficient improvements across
the state.  NYSERDA is also performing energy audits on all projects at publicly owned treatment
works on New York's IUP to identify eligible green components of traditional wastewater infra-
structure projects that would not have been  identified otherwise.  These improvements will be
incorporated into the projects' financing packages.

Streamlining and  Outreach Help West Virginia Meet its Goals

West Virginia's CWSRF program, administered by the West Virginia Department of Environmental
Protection (DEP), began reaching out to communities and consulting engineers in December 2008
in anticipation of ARRA. As a result, the state was able to hit the ground running once the legisla-
tion passed on February 17, 2009. Within ten days, the DEP released a draft Intended Use Plan,
which was then finalized on March 18, 2009.  The state was awarded the  majority of its $61.1
million ARRA allotment by EPA on April 3, 2009, becoming one  of the first states to receive the
award.

West Virginia's CWSRF is also working closely with its partners to ensure that it can award the funds
quickly. The state's Public Service Commission (PSC) regulates utility rates and must approve all
water and wastewater infrastructure projects, including CWSRF  projects,  prior to signing financ-
ing agreements. The CWSRF and the PSC are working together to expedite the approval process.
In addition, the West Virginia Infrastructure and Jobs Development Council brings together fund-
                      CLEAN WATER STATE REVOLVING FUND PROGRAMS

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ing sources and recommends projects for funding. This partnership will allow the CWSRF to co-
fund a large percentage of its ARRA projects with other funding sources.

To further assist disadvantaged communities in West Virginia, the CWSRF is forgiving repayment
of 50 to 100 percent of communities' ARRA financing agreements. In addition, using its authority
to provide extended term financing to communities, the repayment period on the project financ-
ing is extended to 40 years, further reducing annual payments made by the assistance recipients.

Using ARRA to Replace Home Wastewater Systems in Ohio

Upgrade and replacement of failing home treatment systems is an important priority in Ohio. The
CWSRF, managed by the Ohio  Environmental Protection Agency and the Ohio Water Develop-
ment Authority, reserved $5 million of the state's $220.6 million ARRA allotment for this purpose.
They have named this  reserve the "Home Sewage Treatment Reserve."  Under this plan,  CWSRF
funds will be awarded to counties or municipalities, who will then provide funding to homeown-
ers for upgrade and replacement of failing home systems. The local communities will be respon-
sible for oversight of projects in their area.

Each participating homeowner will receive funding for 75  percent of the project from  CWSRF
ARRA funds and provide matching funds for 25 percent of the project. Repayment of the entire
ARRA portion of the assistance will be eliminated under the  principal forgiveness provisions of
ARRA (as a result, homeowners essentially receive a 75 percent grant).

Ohio is using all ARRA funds for principal forgiveness assistance.  Non-septic projects will  receive
ARRA funds, combined with  base CWSRF program loans, in  a  ratio based on local income levels.
Also, for many communities, the base CWSRF program funding is being offered at a zero percent
interest rate. The state is also aiming to spread the funds to as many communities as possible.

Targeting Innovative  Green Projects in Kansas

The Recovery Act requires that CWSRF programs award at least 20 percent of their allotment
to green projects.  The Kansas  CWSRF program is taking this requirement one step further and
seeking to not only exceed the 20 percent requirement but also promote "innovative green" proj-
ects. Roderick L. Bremby, Secretary of the Kansas Department of Health and Environment, which
manages the state's CWSRF program, promoted the benefits and opportunities created by ARRA,
saying "Clean water is essential to  Kansas communities and  the funding provided  through  the
American Recovery Act will allow for projects to be built that might otherwise have taken years
to come to fruition."

The state has set aside one-fifth of its $35.4 million ARRA allotment and received over 60 applica-
tions for "innovative green" projects including wetland restoration, green roofs, rain gardens and
other "soft-path" stormwater management projects. These  projects will receive loans with 75 to
100 percent of the principal forgiven.

Kansas also sought  out traditional green projects, which include energy efficiency, water reuse,
and use of green energy technologies.  The green components  of these projects will receive 50
percent principal forgiveness.  The remainder of the project funding, including the  non-green
components, will be in the form of a loan at the state's standard CWSRF  interest rate.
                                 2009 ANNUAL REPORT

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To accomplish its goal, Kansas developed new project ranking systems for both traditional and
innovative green projects. "Traditional green" projects receive additional priority points for each
month sooner that they will be able to begin construction: projects beginning construction in
April 2009 received  100  additional points, while those beginning construction in January 2010
will receive 10 points. "Traditional green" projects also receive additional priority points based
on improved energy and water use efficiency. For example, a 50 percent reduction in total energy
use at a wastewater treatment plant or sewage  pumping station will receive 25 priority points
and a 2 percent reduction in energy use will receive 1 priority point.

"Innovative green" projects are ranked separately based on the type of projects, anticipated
water quality benefits, construction start date and the population benefiting from the project.

Expanded Outreach Results in Historical Funding Levels in Alaska

Alaska's CWSRF ARRA program is notable for the high level of community outreach that was con-
ducted.  First, the Alaska Department of Environmental Conservation developed a streamlined
CWSRF ARRA loan application, which communities could complete electronically.  In fact, com-
munities could indicate their interest in ARRA financing through an online questionnaire as early
as December 2008. In addition, to advertise the availability of ARRA funding, the CWSRF program
reached out to all communities, including those that had never applied  for CWSRF funds before.
It also reached out to potential borrowers outside the traditional base, such as landfill operators
and recycling facilities.

To further entice Green Project Reserve and nonpoint source projects to apply for ARRA financ-
ing, Alaska's CWSRF is offering  100 percent principal forgiveness (up to $2.5 million) for those
projects.  ARRA point source projects will receive  loans with 90 percent principal forgiveness and
10 percent financed at the program's standard loan terms, which is based on the  length of the
loan and municipal bond  rates. Loan forgiveness is maximized at $2 million for other projects that
do not qualify for the Green Project Reserve.

As a result of its significant outreach efforts, Alaska expects to achieve historical funding levels in
2009 and 2010, and  also  fund several types of projects for the first time.
                      CLEAN WATER STATE REVOLVING FUND PROGRAMS

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CWSRF 2009 Performance Highlights5
  FIGURE 5: 96 PERCENT OF FUNDS COMMITTED TO PROJECTS AS OF FY 2009




                                                   ^

         Cumulative Funds Available
Cumulative Assistance Provided
SUCCESSFULLY DIRECTING FUNDS TO COMMUNITIES

As Figure 5 demonstrates, state CWSRF programs have been very successful in directing funds
toward projects that address pressing water quality problems. Through 2009, CWSRF programs
have committed 96 percent of the $77 billion in cumulative funds available. This strong rate of
fund utilization demonstrates a  high demand for CWSRF financing and is a direct result of the
program's below market interest rates and flexible financing options, targeted marketing and
outreach initiatives, and effective program management.
5 The 2009 Fiscal Year covers the period from July 1, 2008 through June 30, 2009. Data includes ARRA figures
through June 30, 2009.
                               2009 ANNUAL REPORT

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  FIGURE 6: CUMULATIVE ASSISTANCE REACHED $74 BILLION THROUGH FY 2009
— 80
§
1 70
| 60
Jl 50
| 40
a so
120
I 10
                                                                                     $74
                                                                                     $5.2
     1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
        Annual Assistance   • Cumulative Assistance

A CONTINUED SOURCE OF FINANCING

In  FY 2009, the  CWSRF funded over $5.2 billion in projects, increasing cumulative assistance
provided to $74 billion. Of the $5.2 billion in assistance provided, approximately $430 million
consisted of ARRA funds.  Cumulative assistance will continue to grow as appropriations levels,
interest earnings and loan  repayments increase.  In addition, states with high demand for CWSRF
funds will continue to leverage by issuing revenue or general obligation bonds.
  FIGURE 7: CWSRF LOANS SAVE COMMUNITIES 22 PERCENT
                                                                                    2.3%
 1%
 0%
                                           ^
                                                                 A   ofo   fA   fA
   -•-   CWSRF Interest Rate                 Market Rate*
   *Market Rate is measured as the Bond Buyer Index for 20 Year, AA-Rated GO Bonds

SAVING COMMUNITIES MONEY

According to a popular municipal borrowing index, the average municipal borrowing rate was 5
percent in 2009.  By comparison, the average CWSRF loan had an interest rate of only 2.3 percent.
Communities that borrowed from the CWSRF in 2009 saved an average of 22 percent over the life
of a typical 20-year loan.
                       CLEAN WATER STATE REVOLVING FUND PROGRAMS

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  FIGURE 8: CWSRFS PROVIDE $74 BILLION IN FINANCING THROUGH FY 2009
                     4%
                 Nonpoint Source and Estuary

                 POTW: Publicly Owned Treatment Works
              Note: chart on the right represents various POTW
              categories
         1%
Secondary Treatment

Advanced Treatment

SSO: Sanitary Sewer Overflow

New Sewers

CSO: Combined Sewer Overflow

Stormwater/Recycled Water
FUNDING A BROAD RANGE OF PROJECT TYPES

The CWSRF programs were designed to allow states the flexibility to fund projects based on water qual-
ity priorities. As a result, CWSRF programs can and do fund a wide range of project types each year. The
CWSRF has cumulatively funded over $70 billion in various types of POTW projects, including $41 billion
for secondary and advanced treatment facilities and $29 billion for sewer construction. In addition, over
$3 billion in CWSRF funds has gone towards nonpoint source projects such as brownfield rehabilitation,
sanitary landfills, onsite septic systems, hydromodification, agricultural best management practices and
green stormwater infrastructure since the inception of the program.

In FY 2009, $3  billion went to secondary and advanced treatment facilities, $1.9 billion went to sewer
construction, and more than $167 million in funds were used for nonpoint source projects such as
brownfield rehabilitation,  sanitary landfills, hydromodification, onsite septic systems, agricultural best
management practices and green stormwater infrastructure.

Similarly, $412 million in ARRA funds went towards projects at publicly owned treatment works. Of
this amount, $163 million  went to secondary and advanced treatment facilities, and $248 million went
towards sewer construction. An additional $13.7 million in ARRA funds were used for nonpoint source
projects.
                                    2009 ANNUAL REPORT

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  FIGURE 9: COMMUNITIES SERVED BY CWSRFS IN FY 2009
           Dollar Amount of Assistance
                  ($5.2 Billion)
Number of Assistance
 Agreements (1,966)
                                                                  Less than 3,500

                                                                  3,500 to 9,999

                                                                  10,000 to 99,999

                                                                  100,000 and Above
SERVING COMMUNITIES OF ALL SIZES

The CWSRF provides funding to water quality projects in small, medium and large communities
across the country. In FY 2009, 78 percent of all CWSRF assistance agreements, totaling approxi-
mately $1.2 billion, were made with communities of fewer than 10,000 people. Large commu-
nities received a large amount of funding; nearly $2.2 billion dollars went to communities with
populations of 100,000 or more.6

Communities with populations below 10,000 people received over 50 percent of ARRA funding as
of June 30, 2009.  In fact, more than four in ten ARRA assistance agreements were in communities
smaller than 3,500 people.
; Population data was not reported for all of the financing agreements.
                      CLEAN WATER STATE REVOLVING FUND PROGRAMS

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  FIGURE 10: CWSRF PROGRAM RESULTS
  6,082 Projects
  Financed
                     ...To 2,509
                     Communities
                                       56.7 Billion Gallons
                                       Per Day Treated


                                                          $16.6 Billion to Improve Water Quality
                                                          $11.7 Billion to Achieve Compliance
                                                          $16.6 Billion to Protect and Restore
                                                          Aquatic Life and Wildlife
                                                          $3.4 Billion to Protect and Restore
                                                          Drinking Water Sources
                                                          $16.8 Billion to Protect and Restore
                                                          Recreational Uses
   Note: Graph represents the cumulative amount reported by states in the CWSRF Benefits Reporting System as of
   June 30,2009, accounting for approximately 31 percent of cumulative CWSRF financing.
IMPROVING THE ENVIRONMENT

Projected environmental benefits information is available for $23 billion in CWSRF funded proj-
ects. This information shows that these projects contribute significantly to the protection and
restoration of rivers,  lakes, and streams throughout the country. For example, over $16  billion
went to projects that positively affect aquatic life and wildlife, and over $3 billion funded projects
to protect and restore public drinking water supply.

IMPACTING MILLIONS OF AMERICANS

The CWSRF Benefits Reporting System demonstrates that CWSRF funded projects have improved
water quality for millions of Americans. This includes improved access to water for recreational
purposes for over 107 million people, improvements to water that supports fish and shellfish for
consumption for 43 million people, and improved access to clean drinking water for more than
33 million people.
                                   2009 ANNUAL REPORT

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State Agencies and EPA Regional  Offices that
Manage  CWSRF Programs
The state CWSRF staff and EPA Regional Coordinators are responsible for the enormous success of
the CWSRF program and ARRA. They work tirelessly every day to improve the program and main-
tain the high level of innovation that has characterized the CWSRF since the beginning. Without
their efforts, none of the results and initiatives discussed in this report would have been possible.
Below is a list of state agencies and EPA Regional Offices.
EPA REGION 1 - BOSTON, MASSACHUSETTS
Connecticut Department of Environmental
Protection
Connecticut Office of the Treasurer
Maine Municipal Bond Bank
Maine Department of Environmental
Protection
Massachusetts Water Pollution Abatement
Trust
Massachusetts Department of Environmental
Protection
New Hampshire Department of Environmental
Services
Rhode Island Clean Water Finance Agency
Rhode Island Department of Environmental
Management
Vermont Department of Environmental
Conservation
Vermont Municipal Bond Bank
EPA REGION 2 - NEW YORK, NEW YORK
New Jersey Department of Environmental
Protection
New Jersey Environmental Infrastructure Trust
New York State Environmental Facilities
Corporation
New York Department of Environmental
Conservation
Puerto Rico Environmental Quality Board
Puerto Rico Infrastructure Financing Authority
                    CLEAN WATER STATE REVOLVING FUND PROGRAMS

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EPA REGION 3-PHILADELPHIA, PENNSYLVANIA
Delaware Department of Natural Resources
and Environmental Control
Maryland Department of the Environment
Pennsylvania Infrastructure Investment
Authority
Pennsylvania Department of Environmental
Protection
Virginia Department of Environmental Quality
Virginia Resources Authority
West Virginia Department of Environmental
Protection
West Virginia Water Development Authority
West Virginia Infrastructure and Jobs
Development Council
EPA REGION 4 - ATLANTA, GEORGIA
Alabama Department of Environmental
Management
Florida Department of Environmental
Protection
Georgia Environmental Facilities Authority
Kentucky Infrastructure Authority
Kentucky Division of Water
Mississippi Department of Environmental
Quality
North Carolina Department of Environment
and Natural Resources
South Carolina Department of Health and
Environmental Control
South Carolina Budget and Control Board
Tennessee Department of Environment and
Conservation
Tennessee Comptroller of the Treasury
EPA REGION 5 - CHICAGO, ILLINOIS
Illinois Environmental Protection Agency
Indiana Department of Environmental
Management
Indiana Bond Bank
Indiana Finance Authority
Michigan Department of Environmental
Quality
Michigan Municipal Bond Authority
Minnesota Public Facilities Authority
Minnesota Pollution Control Agency
Minnesota Department of Agriculture
Ohio Environmental Protection Agency
Ohio Water Development Authority
Wisconsin Department of Natural Resources
Wisconsin Department of Administration

EPA REGION 6 - DALLAS, TEXAS
Arkansas Natural Resources Commission
Arkansas Development Finance Authority
Louisiana Department of Environmental
Quality
New Mexico Environment Department
Oklahoma Water Resources Board
Texas Water Development Board

EPA REGION 7 - KANSAS CITY, MISSOURI
Iowa Department of Natural Resources
Iowa Finance Authority
Kansas Department of Health and
Environment
                                2009 ANNUAL REPORT

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Kansas Department of Administration
Kansas Development Finance Authority
Missouri Department of Natural Resources
Missouri Environmental Improvement and
Energy Resources Authority
Nebraska Department of Environmental
Quality
Nebraska Investment Finance Authority
EPA REGION 8 - DENVER, COLORADO
Colorado Water Resources and Power
Development Authority
Colorado Department of Public Health and
Environment
Colorado Department of Local Affairs
Montana Department of Environmental
Quality
Montana Department of Natural Resources
and Conservation
North Dakota Department of Health
North Dakota Public Finance Authority
South Dakota Department of Environment and
Natural Resources
Utah Department of Environmental Quality
Wyoming Department of Environmental
Quality
Wyoming Office of State Lands and
Investments
EPA REGION 9 - SAN FRANCISCO, CALIFORNIA
Arizona Water Infrastructure Finance
Authority
California State Water Resources Control
Board
Hawaii Department of Health
Nevada Department of Conservation and
Natural Resources
EPA REGION 10 - SEATTLE, WASHINGTON
Alaska Department of Environmental
Conservation
Idaho Department of Environmental Quality
Oregon Department of Environmental Quality
Washington Department of Ecology
 The state CWSRF staff and
 EPA Regional Coordinators
      are responsible for the
        enormous success of
   the  CWSRF program and
                            ARRA.
                   CLEAN WATER STATE REVOLVING FUND PROGRAMS

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PISCES AWARDS:  Recognizing Exceptional  State
CWSRF Accomplishments
The 2009 PISCES Awards (Performance and
Innovation in the SRF Creating Environmental
Success)  recognized states that  have shown
exceptional leadership and  effectiveness  in
protecting water quality and financial integrity
through the Clean Water State Revolving Fund
program.

In  2009, a CWSRF PISCES Award was pre-
sented to one state from each of the 10 U.S.
EPA Regions.  These recipients  of the fifth
annual PISCES awards are examples  of out-
standing  performance, creativity, and integrity
in the CWSRF program.  Winners were recog-
nized and presented with their awards at the
national SRF workshop hosted by the Council
of Infrastructure Financing Authorities (CIFA) in
Seattle, Washington in November, 2009.
                             2009 ANNUAL REPORT

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               REGION 10: ALASKA
The Alaska Department of Environment Conservation's
CWSRF program implemented a highly effective outreach
effort in anticipation of ARRA. In addition to its traditional
borrower  base,  the CWSRF  targeted  disadvantaged
communities,  landfills,   recycling  facilities and  non-
traditional potential  assistance recipients.  As a result,
Alaska will provide more CWSRF funding to communities
this year than in any single prior year.
                REGION 9: HAWAII
Improved  outreach  to Hawaii's four counties,  lower
interest rates and reduced fees have helped increase the
CWSRF program pace from 68 to 97 percent in four years.
In addition,  the CWSRF, administered by  the  Hawaii
Department of Health, is using ARRA funds to replace old
existing pumps with  energy-efficient pumps guaranteed
to result in a 20 percent savings in energy costs at Maui's
wastewater treatment system, and to install solar cells in
Kauai's Waimea treatment facility to reduce the plant's
energy costs.
               REGIONS: WYOMING
Over  the  years  Wyoming's  CWSRF  program   has
developed an innovative partnership with the state to
address groundwater remediation  issues through their
leaking  underground storage tank removal  program.
Approximately 45 percent of Wyoming's CWSRF assistance
has gone to removing leaking underground storage tanks
to protect groundwater. The Wyoming Department of
Environmental Quality and the Wyoming Office of State
Lands and Investment, which jointly manage the CWSRF,
also recognize that water efficiency has become more
critical for wastewater utilities, particularly those in the
West, and have identified and targeted numerous water
reuse projects for CWSRF funding.
                 REGION 7: IOWA
Over the past several years,  Iowa's CWSRF,  administered
by the Iowa Department of Natural Resources  and  the
Iowa Finance Authority, has greatly increased outreach to
potential borrowers, consulting engineers, financial advisors
and other stakeholders. These  marketing activities have
significantly increased demand for funds; program pace is at
104 percent as of the end of FY 2009. The Iowa CWSRF also
recently leveraged for the first time in several years.
                  2009  Pisces  A
             REGION 6: NEW MEXICO
The New Mexico Environment Department employs a
Community Services Coordinator in its CWSRF program.
The Coordinator  performs  outreach  to  communities,
manages  the  state's  centralized  application for all
water  and  wastewater funding  programs, and fosters
coordination with other state and federal funding agencies.
The CWSRF also participates in bi-weekly meetings with
other  infrastructure  financing agencies to coordinate
funding. These efforts have increased the marketability of
the program and resulted in improved pace and increased
transparency of the program's operations.
                              CLEAN WATER STATE REVOLVING FUND PROGRAMS

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                                                                            REGION 1: MAINE
.ward  Winners
Maine's CWSRF, administered by the Maine Department
of Environmental Protection  and the Maine  Municipal
Bond Bank, collaborates with federal and state financing
programs to create  affordable funding  packages for
communities.  Such  partnerships helped  Maine  be  a
leader in utilizing ARRA funds quickly.
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                                                                          REGION 2: NEW YORK
                                                            New York's CWSRF, a partnership of the New York State
                                                            Department  of Environmental Conservation  and the
                                                            New York State  Environmental Facilities Corporation,
                                                            directed a portion of its ARRA Green Project Reserve to
                                                            green upgrades to traditional wastewater projects. It also
                                                            worked with the New York State Energy  Research and
                                                            Development Authority and the New York State Regional
                                                            Greenhouse  Gas Initiative  to leverage $14  million in
                                                            funding for energy efficiency improvements
            REGION 3: WEST VIRGINIA
West Virginia more than doubled its cumulative amount
of nonpoint source funding in only one year by using
a watershed approach to funding point  source  and
nonpoint source projects. The CWSRF, which is managed
by the  West Virginia  Department of  Environmental
Protection,  also  partnered  with  the  West  Virginia
Housing Development Fund to address failing on-site
septic systems.
                    REGION 5: INDIANA
     The  Indiana  Finance Authority's  CWSRF  program
     partners with other state and Federal funding agencies
     to streamline the financing process and make  more
     funds available for important water quality projects.
     It also  partners  with the  Indiana  Department of
     Environmental Management to use local pollutant load
     data to identify funding priorities and rank projects.
              REGION 4: KENTUCKY
Kentucky's  CWSRF,  administered  by the  Kentucky
Infrastructure Authority, partners with other financing
agencies to reach more projects. It also uses a watershed
approach to funding. These practices have allowed the
state to fund innovative projects under the ARRA Green
Project  Reserve,  including  a  terraced  reforestation
project and bio-energy management at a horse park.
                                                 2009 ANNUAL REPORT

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2009  Financial Performance Overview
The Clean Water Act requires an annual finan-
cial audit of the 51 state-level CWSRF programs.
Each state and  Puerto  Rico conducts these
audits  according to the generally accepted
auditing standards established by the Govern-
mental Accounting Standards  Board  (GASB).
States often define their CWSRF  programs as
ongoing enterprise funds under the GASB defi-
nitions of  funds.  The standardized  financial
statements used for CWSRF programs include
the following:

STATEMENT OF FUND ACTIVITY

This statement provides  an overview of major
indicators of fund activity, including the major
capitalization  grant  levels, project  commit-
ments,  and  project  disbursements.   Both
annual and cumulative data are  given.

STATEMENT OF  REVENUES,  EXPENSES, AND
EARNINGS

This statement describes the  overall perfor-
mance of the  CWSRF fund over the reporting
period.
STATEMENT OF NET ASSETS

This statement describes a  fund's assets and
liabilities through the end of the fiscal year.
Assets  include financial assets  and capital
assets; liabilities include both current and long-
term liabilities.  CWSRF fund  assets include
grant funds that have been drawn from the fed-
eral treasury to date, but do not include total
grant awards.

STATEMENT OF CASH FLOWS

This statement provides a detailed accounting
of the actual flow of cash into and out of the
CWSRF fund.

Because the 51 constituent CWSRF programs
are independent state-level entities, no nation-
ally audited CWSRF program financial reports
are  available.  However, using  EPA's National
Information  Management  System,  national
aggregate financial  statements  have  been
developed and are included in the following
pages. The statements are best viewed as non-
audited, cash flow-based financial reports.
Note: American Recovery and Reinvestment Act (ARRA) data as of June 30, 2009 are included in FY 2009 figures.
                     CLEAN WATER STATE REVOLVING FUND PROGRAMS

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  FINANCIAL STATEMENT HIGHLIGHTS
            •  Total assets increased by $3.0 billion, a 5.4 percent increase from 2008.

            •  CWSRF program equity (net assets) totals $35.5 billion, a 5 percent increase
               from 2008.

            •  Total program revenues exceeded expenses by $1.7 billion, with interest earn-
               ings from loans and investments totaling over $1.5 billion.

            •  Loan principal repayments to the CWSRF were $2.6 billion.

            •  Leveraged bond proceeds added $2.4 billion to program cash flow.
CWSRF National  Performance Summary
(Millions of Dollars)
STATEMENT OF FUND ACTIVITY

Annual Fund Activity
Federal Capitalization Grants
State Matching Funds
New Funds Available for Assistance
Project Commitments (Executed Loan Agreements)
Project Disbursements
Cash Draws from Federal Capitalization Grants
Cumulative Fund Activity
Federal Capitalization Grants
State Matching Funds
Funds Available for Assistance
Project Commitments (Executed Loan Agreements)
Project Disbursements
Cash Draws from Federal Capitalization Grants


FY 2009
2,698
114.7
7,222.7
5,231.7
5,151.6
870.8

28,830.4
5,686.2
77,188.4
74,045.1
64,841.9
25,662.4


FY 2008
1,164.9
264.3
4,987.0
5,837.9
5,530.4
1,176.2

26,132.4
5,571.5
69,965.7
68,813.3
59,690.3
24,791.6


% Change
132%
-57%
45%
-10%
-7%
-26%

10%
2%
10%
8%
9%
4%
 Note: Statement presents a compilation of reporting from 51 state programs and is not audited. Sum of individual values may not exactly
 equal the total due to rounding error. 2008 data was revised from the 2008 Annual Report to incorporate updated state information.
 Source: EPA's CWSRF National Information Management System (June 30,2009).
                                    2009 ANNUAL REPORT

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 STATEMENT OF REVENUES, EXPENSES, AND EARNINGS
Operating Revenues
  Interest on Investments
  Interest on Loans
       Total Operating Revenues
Operating Expenses
  Bond Interest Expense
  CWSRF Funds Used for Refunding
  Amortized Bond Issuance Expense
  Administrative Expenses
       Total Expenses
Nonoperating Revenues and Expenses
  Federal Contribution
  State Contributions
  Transfers from (to) DWSRF
       Total Nonoperating Revenues (Expenses)
  Increase (decrease) in Net Assets
Net Assets
  Beginning of Year
  End of Year
FY 2009
536.1
1,023.7
1,559.8
33,800.5
35,499.0
FY 2008
734.7
956.4
1,691.1
31,942.4
33,800.5
% Change
-27%
7%
-8%
745.5
0.0
14.7
41.8
802.0
1,009.7
135.5
14.4
43.7
1,203.4
-26%
-100%
2%
-4%
-33%
870.8
68.2
1.7
940.7
1,698.5
1,176.2
205.7
(11.4)
1,370.4
1,858.1
-26%
-67%
115%
-31%
-9%
6%
5%
Note: Statement presents a compilation of reporting from 51 state programs and is not audited. Sum of individual values may not exactly
equal the total due to rounding error.  2008 data was revised from the 2008 Annual Report to incorporate updated state information.
Source: EPA's CWSRF National Information Management System (June 30,2009).
                            CLEAN WATER STATE REVOLVING FUND PROGRAMS

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STATEMENT OF CASH FLOWS

Operating Activities
Cash Draws from Federal Capitalization Grants
Contributions from States
Loan Disbursements Made to Borrowers
Loan Principal Repayments
Interest Received on Loans
Administrative Expenses
Total Cash Flows from Operating Activities
Noncapital Financing Activities
Gross Leveraged Bond Proceeds
Bond Issuance Expense
State Match Bond Proceeds
Cash Received from Transfers with DWSRF
Interest Paid on Leveraged and State Match Bonds
CWSRF Funds Used for Refunding
Principal Repayment of Leveraged Bonds
Principal Repayment of State Match Bonds
Net Cash Provided by Noncapital Financing Activities
Cash Flows from Capital and Related Financing
Activities
Investing Activities
Interest Received on Investments
Deposits to Debt Service Reserve for Leveraged Bonds
Net Cash Provided by Investing Activities
Net Increase (Decrease) in Cash and Cash Equivalents
Beginning Balance - Cash and Cash Equivalents
Ending Balance - Cash and Cash Equivalents
FY 2009
870.8
68.2
(5,151.6)
2,597.6
1,023.7
(41.8)
(633.0)

2,398.1
(18.7)
46.5
1.7
(745.5)
0.0
(1,055.3)
(69.8)
557.1
0.0


536.1
(244.4)
291.7
215.7
8,932.0
9,147.8
FY 2008
1,176.2
205.7
(5,530.4)
2,301.2
956.4
(43.7)
(934.7)

1,966.5
(20.4)
58.6
(11.4)
(1,009.7)
(135.5)
(953.9)
(76.3)
(182.1)
0.0


734.7
(118.9)
615.8
(500.9)
9,433.0
8,932.0
% Change
-26%
-67%
7%
13%
7%
4%
32%

22%
8%
-21%
115%
26%
100%
-11%
9%
406%



-27%
-106%
-53%
143%
-5%
2%
Note: Statement presents a compilation of reporting from 51 state programs and is not audited. Sum of individual values may not exactly
equal the total due to rounding error. 2008 data was revised from the 2008 Annual Report to incorporate updated state information.
Source: EPA's CWSRF National Information Management System (June 30,2009).
                                              2009 ANNUAL REPORT

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••••••••••i
ASSETS
Cash and Cash Equivalents
Debt Service Reserve - Leveraged Bonds
Loans Outstanding
Unamortized Bond Issuance Expenses*
Total Assets
LIABILITIES
Match Bonds Outstanding
Leveraged Bonds Outstanding
Total Liabilities
NET ASSETS
Federal Contributions
State Contributions
Transfers - Other SRF Funds
Other Net Assets
Total Net Assets
TOTAL LIABILITIES & NET ASSETS
FY 2009
9,147.8
7,458.6
42,357.0
298.4
59,261.7

545.4
23,217.3
23,762.7

25,662.4
4,299.5
(397.2)
5,934.3
35,499.0
59,261.7
FY 2008
8,932.0
7,214.2
39,803.0
294.4
56,243.7

568.6
21,874.5
22,443.2

24,791.6
4,231.3
(398.9)
5,176.5
33,800.5
56,243.7
% Change
2%
3%
6%
1%
5%

-4%
6%
6%

4%
2%
0%
15%
5%
5%
Note: Statement presents a compilation of reporting from 51 state programs and is not audited. Sum of individual values may not exactly
equal the total due to rounding error. 2008 data was revised from the 2008 Annual Report to incorporate updated state information.
Source: EPA's CWSRF National Information Management System (June 30,2009).

*Unamortized Bond Issuance Expenses are costs that have been incurred but have not been fully recognized (amortized). These costs
will be recognized (amortized) over time over the remaining life of the bonds outstanding, similar to a pre-paid expense, and consistent
with GAAP
                                 CLEAN WATER STATE REVOLVING FUND PROGRAMS

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CWSRF Initiatives for FY 2010
In  2010,  EPA will  continue working with the
CWSRF programs to expand assistance to non-
traditional projects, such as stormwater man-
agement, clean energy, replacement of failing
septic systems and cleanup of contaminated
sites.  In addition, EPA will also continue its
existing  projects to maximize the benefits of
the CWSRF program and promote professional
development. The initiatives include:

PARTNERSHIP FOR SUSTAINABLE
COMMUNITIES

On June  16,  2009, EPA, the Department of
Transportation (DOT)  and  the Department
of Housing and  Urban  Development (HUD)
announced an exciting new partnership.  The
HUD-DOT-EPA  Interagency  Partnership  for
Sustainable Communities is an innovative col-
laboration between the  three  agencies with
the goal of coordinating federal investments in
housing, transportation, clean water and other
infrastructure elements to protect the environ-
ment, promote  equitable  development,  dis-
courage sprawl and address  climate change.
As EPA Administrator Lisa Jackson noted in her
June 16,  2009 address to Congress,  "As part
of our partnership with DOT and HUD, we will
work with states and tribes to harmonize water
infrastructure investments with transportation
and housing investments to promote smarter
growth."

The Clean Water State Revolving Fund will play
a critical role in the Partnership for Sustainable
Communities. The partnership will build on the
significant flexibility of state CWSRF programs
to direct funds to  important sustainable infra-
structure priorities. New Jersey's CWSRF pro-
gram, for example, has a history of providing
financial incentives for projects that promote
smart growth.  Wastewater, stormwater and
nonpoint source projects in urban centers and
mixed-use  developments  in New Jersey  can
obtain financing at lower interest rates than
the state's typical  CWSRF rates.  The Partner-
ship for Sustainable Communities will encour-
age states to incentivize projects that imple-
ment sustainable management practices.

   • EPA will be sponsoring a CWSRF Pilot Pro-
    gram for Sustainable Communities. Under
    this program, several  states will  receive
    technical assistance from EPA to modify or
    expand their CWSRF programs to encour-
    age development  under the principles of
                                 2009 ANNUAL REPORT

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    the Partnership  for Sustainable Commu-
    nities. The goal is to  use the results and
    lessons learned  from the pilot program
    to promote more widespread adoption of
    practices that encourage states to reinvest
    in their  existing infrastructure systems.
    At the conclusion of  the  pilot program,
    EPA will publish a best practices guide for
    CWSRF programs who wish to adopt the
    principles of sustainable development.

  • The Green Project Reserve, introduced into
    the CWSRF program by ARRA, has  been
    extended to the 2010 CWSRF appropria-
    tion.  As  a result, 20 percent of the fund-
    ing provided by the 2010  appropriation
    will be directed to green infrastructure,
    water or energy efficiency improvements
    or other environmentally innovative activ-
    ities.  Many states used this opportunity
    under ARRA to fund projects that promote
    low-impact  development  and  prevent
    stormwater runoff- important aspects of
    sustainable communities.

  • Inorderto help ensure that projects funded
    with federal CWSRF funds are sustainable,
    EPA will  also be working with states and
    utilities to develop guidance that describes
    the elements of a system-wide planning
    process and a series of  best practices for
    potential CWSRF funding recipients. These
    practices  will help  potential  recipients
    inventory, assess and  characterize  their
    critical infrastructure assets, ensure  that
    the  necessary  pricing structures  are in
    place to operate and maintain these assets,
    and establish, where appropriate, collabo-
    ration, partnership, or restructuring rela-
    tionships with higher capability entities.

CHESAPEAKE BAY MEETING

EPA will host  a meeting in  2010 with states
within the Chesapeake Bay watershed to dis-
cuss the role  of the CWSRF in  protecting and
restoring the Bay.  State CWSRF managers and
staff will discuss the types of projects they are
already funding to achieve this goal, including
examples  of  ARRA-funded  projects that can
be easily replicated in other states. The use of
CWSRF eligibilities that are not currently uti-
lized,  as  well as strategies for  implementing
these eligibilities  (such as inter-state  lending
opportunities) will also be discussed.

CWSRF FINANCIAL MANAGEMENT AND
OVERSIGHT

With  over $77 billion  in funds  available for
loans,  states and EPA  devote  a significant
amount of energy to ensuring adequate over-
sight  and management  of  CWSRF financial
resources. In 2010, EPA will assist these efforts
through activities such as the following:

  • In 2009, EPA held a successful workshop on
    oversight and management of the CWSRF
    programs for new federal employees. In
    2010, EPA will  follow up that successful
    event with a new EPA employee workshop
    on SRF financial management practices.
    The workshop will cover transaction test-
    ing, audits, leveraging and other topics.

  • EPA will continue development  of the
    CWSRF  Financial Accreditation Program,
    which aims to ensure that state and EPA
    staff  is  knowledgeable of financial  man-
    agement  requirements, processes  and
    statutes.   The Accreditation Program
    consists of a series of open  book exams
    on topics such as cash draws, audits and
    municipal finance.
                      CLEAN WATER STATE REVOLVING FUND PROGRAMS

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EXPANDED CWSRF MARKETING AND
OUTREACH

Marketing and outreach are essential elements
of the continued success and growth of the
CWSRF programs.  EPA will continue  to work
on enhancing outreach efforts in the next year
with various tools:

  • ARRA brought with it a focus on "green"
    projects, due to a requirement to use 20
    percent  of  the capitalization grant for
    green  infrastructure, water  or  energy
    efficiency improvements or other envi-
    ronmentally innovative  activities.   This
    requirement  is also  included  in  the
    CWSRF's FY 2010 appropriations.  EPA will
    continue working with states on  meeting
    this  requirement,  providing  numerous
    case studies of successful  projects,  and
    working  with stakeholders  to encourage
    effective use of the Green Project Reserve.

  • EPA's biannual  newsletter,  SRFs  Up,  has
    been a successful  tool to provide infor-
    mation on  new developments and inno-
    vations in the CWSRF.  It has been  used
    to highlight creative practices, showcase
    innovative  projects and  discuss develop-
    ments in Washington D.C.

  • CWSRF Activity Updates provide  more
    extensive case  studies  and analyses of
    financial and programmatic innovations
    implemented throughout the country. For
    example, in 2009, EPA published an activ-
    ity update  on  using geographic informa-
    tion systems technology to achieve CWSRF
    program goals.  Activity  updates will be
    developed in 2010 to highlight other com-
    pelling topics.

  • The  Financing  Alternatives Comparison
    Tool  (FACT) allows users  to compare the
    true  costs of different financing options. It
    has been used successfully in several states
    to help communities determine their most
    cost-effective financing options.  EPA will
    be releasing a simplified version of FACT,
    referred to as FACT-Lite, to streamline the
    data entry requirements and open up the
    tool to a wider audience.

ENHANCING CWSRF PERFORMANCE AND
OVERSIGHT

EPA and states conduct a significant  amount of
oversight of programs and projects.  ARRA has
introduced new challenges to these processes. In
2010, EPA plans to conduct the following activities:

  • EPA has long performed annual reviews of
    state procedures and transactions. In 2009,
    due to the greater capitalization amount,
    the  CWSRF  ARRA  funds  will undergo
    reviews bi-annually.  These reviews  will
    continue through 2010.  In addition,  EPA
    will maintain its practice of evaluating EPA
    Regional Offices in 2010.

  • The Benefits Re porting System has become
    an  invaluable tool  to  demonstrate  the
    positive water quality and public health
    impacts of CWSRF projects.  In 2010,  EPA
    will continue to  refine  and enhance  this
    reporting tool.
                                  2009 ANNUAL REPORT

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CWSRFAT-A-G LANCE
FUNDS AVAILABLE FOR PROJECTS
(Billions of Dollars) 2009 1998-
2009
Total Funds 7.2 77.2
Federal Cap Grants 2.7 28.8
State Match 0.11 5.7
Net Leveraged Bonds 2.2 24.6
Net Loan Principal 1.5 13.2
Repaid
Net Interest Earnings 0.8 6.3
Net Transfers with 0.002 (0.3)
DWSRF
Less Administration (0.1) (1.1)

Number of Loans: 2009 = 1,971; Total =
24,688
Return on Federal Investment = 2.53
SRF Assistance As % of Funds Available =
96%

Interest Rate in 2009 = 2.3% (Market=5%)
27 States Leverage; 21 Issue Match Bonds

42 States Fund Nonpoint Source Projects
30 States Use Integrated Priority Systems
48 States Conduct Separate Audits

40 States Fund Separate Grant / Loan
Programs
ASSISTANCE PROVIDED TO PROJECTS
(Billions of Dollars)

Total Project Type
Wastewater Treat-
ment
Nonpoint Source
Not Classified

Total Population
Served
<3,500
3,500-9,999
10,000-99,9999
100,000-and Above

Wastewater
Treatment
Secondary Treat-
ment
Advanced Treat-
ment
SSO Correction
New Sewers
CSO Correction
Storm Sewers
Recycled Water


2009

5.2
5.0

0.2
0

5.2

0.6
0.6
1.8
2.2

5.0

1.8

1.3

0.5
0.7
0.5
0.1
0.1


1998-
2009
74.0
70.3

3.0
0.7

74.0

7.9
8.8
25.0
32.3

70.3

28.0

13.1

8.3
12.8
7.2
0.5
0.4


2009
ARRA
0.43
0.41

0.02
0

0.43

0.11
0.11
0.16
0.05

0.41

0.13

0.03

0.07
0.13
0.02
0.02
0.01


CLEAN WATER STATE REVOLVING FUND PROGRAMS

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For more  information about  the Clean Water
State Revolving Fund, please contact:
               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
                WWW.EPA.GOV/OWM/CWFINANCE/CWSRF

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       OFFICE OF WATER • JUNE 2010 • EPA-832-R-10-001

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