Possible Funding Sources for
Managing Cyanobacterial
Harmful Algal Blooms and
Cyanotoxins in Drinking Water
Cyanobacteria, formerly known as blue-green algae, naturally occur in marine and fresh waters.
Under certain conditions cyanobacteria can grow rapidly, producing cyanobacterial blooms.
Some cyanobacteria are capable of producing toxins, called algal toxins or cyanotoxins, which
can pose health risks to humans and animals through exposure from drinking water,
recreational water or other surface waters. Blooms are often referred to as harmful algal
blooms (HABs).
Preventing, treating, and monitoring for HABs can be an unanticipated cost for a public water
system. This document assists vulnerable public water systems and states in identifying
available financing options for the prevention of HABs and treatment of finished water with
cyanotoxin contamination. The options explored in this document include the Drinking Water
State Revolving Fund (DWSRF), the Clean Water State Revolving Fund (CWSRF), and alternative
funding options. Low interest loans are available through the DWSRF and CWSRF to eligible
recipients. Both are managed by states and funding varies according to the priorities, policies,
and laws within each state. State DWSRF and CWSRF representatives should be contacted for
more information about funding availability.
HOW CAN THE DRINKING WATER STATE REVOLVING
FUND ASSIST SYSTEMS WITH HABS?	
The DWSRF makes funds available to drinking water systems to finance infrastructure
improvements. In addition, states can use up to 31 percent of their annual capitalization grant
as set-asides to offer technical assistance, capacity development, or other local assistance to
drinking water systems. The program also emphasizes funding for small and disadvantaged
communities and has the potential to fund technical assistance through states' source water
protection programs using the set-asides as a tool to ensure safe drinking water. Below are
types of activities that can be funded.
Equipment
Drinking water systems are eligible to receive funding from the DWSRF project loan fund to add
new equipment and upgrade existing technologies. A state could also use DWSRF set-asides to
&EPA
United States
Environmental Protection
Agency
OVERVIEW
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obtain test kits or laboratory equipment for systems to test for HABs, as long as certain
requirements are met.
Monitoring
Routine/compliance monitoring is not an eligible DWSRF expense. While operation and
maintenance are ineligible costs for both the project loan fund and the set-asides, a state may
finance special non-routine monitoring using the Local Assistance set-aside (capital
development is one of the activities available under this set-aside). This monitoring would need
to be associated with newly-installed equipment to ensure that the equipment is operating
properly and meets equipment specifications as part of the equipment delivery and installation
process, or to obtain a baseline for an emerging contaminant of concern. Additionally, the
activity must be consistent with a state's capacity development strategy. The state must also
report on its progress as part of its annual/biennial DWSRF reporting.
Training
A state could also use the DWSRF Local
Assistance set-aside to conduct non-routine
monitoring at a system for the purpose of
training system operators and assisting them
in acquiring the capacity to independently
conduct routine monitoring in the long-term.
For example, public water systems can request
reimbursement for training for analysis of
toxins associated with HABs (see Ohio Case
Study).
OHIO CASE STUDY
In 2015, Ohio used the set-asides to establish
a $1 million fund that awarded grants to
surface water treatment plants to reimburse
the purchase of cyanotoxin investigative
monitoring equipment. Having the capacity to
analyze samples at the water supply instead
of sending samples to an outside laboratory
will allow flexibility in monitoring and timely
response to any potential finished water
detections.
Source Water Protection
It is important to prevent HABs through source water protection before it enters the drinking
water treatment facility to avoid contamination of finished water. States can use the State
Program Management set-aside to administer or provide technical assistance through their
source water protection programs. In addition, the Local Assistance set-aside can be used to
build capacity of individual systems to carry out source water protection, which could be
connected to source water HABs. Examples of eligible activities under these two set-asides
include source water management plans, buffer establishment and upkeep, and storm water
management and reconstruction activities.
The Local Assistance set-aside can also be used by states to help systems develop public
outreach and educational programs and materials. The State Program Management set-aside
can provide funding for states to develop source water protection ordinance templates for city
and county governments, and provide technical assistance for systems in the form of
workshops, training, and certification programs.
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Special Opportunities for Small Systems
Small public water systems historically have had difficulties in meeting the requirements of the
SDWA. Therefore, the 1996 Amendments to the SDWA included three specific sections that
stipulate the provision of special assistance to systems that servce 10,000 or fewer people,
including a section establishing the Small System Technical Assistance set-aside described
below.
As a result of the 1996 Amendments, states are required to provide a minimum of 15 percent of
the funds available for assistance to small systems to help address infrastructure needs. This
could include HABs prevention and treatment. The DWSRF also has a Small Systems Technical
Assistance set-aside that enables states to provide technical assistance and training to help
small systems develop projects and build capacity.
For more information, please see the EPA Fact Sheet:
Small Water Systems
HOW CAN THE CLEAN WATER STATE REVOLVING FUND
ASSIST SYSTEMS WITH HABS?	
The CWSRF was established by the 1987 amendments to the Clean Water Act (CWA) as a
financial assistance program for a wide range of water infrastructure projects. To be eligible for
CWSRF assistance, a project must meet the criteria of one of the eleven CWSRF eligibilities
outlined in Section 603(c) of the CWA.
Source Water Protection
The CWSRF is a low-interest source of funding for a variety of capital projects related to source
water protection, where they implement a state nonpoint source management plan. These
include tree plantings and other protection activities that take place in a well head protection
area or surface water drainage area and the purchase of land for water quality purposes.
CWSRF funds can also be used for source water planning and assessment activities if there is a
reasonable chance the work could lead to a
capital expenditure. Planning activities eligible
to receive CWSRF funds that could be
relevant to HABs include climate and extreme
weather vulnerability planning, total
maximum daily load (TMDL) implementation
plans, and watershed management plans.
Source water protection activities can also
include water quality trading programs.
CWSRF can provide funding for nonpoint
source projects that produce water pollution
Washington State
In 2009, Washington State's Water
Pollution Control Revolving Fund provided
a total of $5 million in loans for the
Conservation Tillage Sediment Reduction
Program. Funds are provided to farmers
to purchase conservation tillage
equipment and implement other
agricultural BMPs. The program also
provides education and technical
assistance to farmers.
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control credits that can be sold for revenue. Water quality trading can occur for point and
nonpoint sources of pollution.
Pollution Management
Funds are available for the implementation of a variety of watershed pollution management
activities related to HABs, including: removal of leaking or damaged septic systems,
implementation of agricultural BMPs such as no-till equipment and manure management
measures, and wetland restoration. Other projects to prevent the degradation of water quality
that are less focused on drinking water systems, but still impact source water, include green
infrastructure and stormwater management activities.
Other Activities and CWSRF Funding Opportunities
Funds are available for the initial development and implementation of an education or
outreach program, but cannot be used for the ongoing implementation of an education or
training program. Eligible activities include the development of fact sheets, posters, or other
outreach materials, as well as workshop planning and material development for community
engagement activities. Water quality monitoring equipment (e.g., sensors, meters, gauges) and
activities (e.g., sampling, lab work, data analysis) to evaluate project effectiveness may be
eligible for CWSRF assistance. Routine ambient water quality monitoring is not eligible.
CWSRF funds are available under Section 603(c)(7) for the development or implementation of
watershed projects related to one of the six areas identified in Section 122 of the CWA: 1)
watershed management of storm discharge; 2) stormwater BMPs; 3) watershed partnerships;
4) integrated water resource planning; 5) municipality-wide stormwater management planning;
and 6) increased resilience of treatment works. In some cases, projects related to the
prevention or reduction of HABs could meet the criteria for these project areas.
WHAT ARE ALTERNATIVE METHODS OF FUNDING FOR
HABS?	
There are alternative HAB-related funding options for treatment, monitoring and source water
protection. These funding options include both federal and local programs. State or tribal
coordinators should be contacted to see if there are more options available in that state.
319 (Nonpoint Source) Grants
The 1987 Clean Water Act (CWA) amendments established the Section 319 Nonpoint Source
Management Program in an effort to establish greater federal support to aid nonpoint source
pollution protection efforts. Under Section 319, states, territories, and tribes receive grant
money for state priority areas. States have flexibility to focus these funds with the goal of
reducing nonpoint sources of polluted runoff. These funds can also be allocated to nutrient
reduction efforts, which can reduce HABs.
Nonpoint source control practices may include restoration of wetland and floodplain hydrology
and vegetation; treatment of urban and agricultural runoff; reforestation; and public education.
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106 (Water Pollution Control) Monitoring Grants
Eligible federal funding sources for source water monitoring include CWA Section 106; Water
Pollution Control Grants. CWA Section 106 funding is received annually and consists of base
funding and the 106 monitoring initiative enhancement fund.
These grants support water pollution prevention and control programs and activities such as
monitoring and assessing water quality, developing water quality standards, and identifying
impaired waters. Goals and programs supported include total maximum daily loads, managing
national pollutant discharge elimination system permits, ensuring compliance, implementing
enforcement actions, protecting source water, and managing outreach and education
programs.
USDA Rural Development Program - Water and Environmental Programs (WEP)
The Rural Development Program provides loans, grants, and loan guarantees to support critical
rural services including water infrastructure. Support is provided in the form of loans to
businesses and as technical assistance and information. Most grants limit eligibility to
communities with fewer than 10,000 people, with special consideration given to impoverished
and very small (<5,000 people) communities.
A subset of the Rural Development Program is the Water and Environmental Programs funding
source, which provides technical assistance and financing to rural communities to develop
drinking water and waste disposal systems. WEP funding is provided for the construction of
water and wastewater facilities in rural communities, with funding for specific infrastructure
needs such as water well systems, solid waste management, water and waste disposal, and
water treatment.
http://www.rd.usda.gov/ and http://www.rd.usda.gov/programs-services/all-programs/water-
environmental-programs
Regional Conservation Partnership Program (RCPP)
USDA provides funding through the RCPP to foster restoration efforts and the sustainable use
of soil, water, flora, and fauna at regional and watershed scales. Through the RCPP, funding
recipients partner with agricultural producers to help the producers implement and maintain
conservation activities in defined project areas. The partners administer RCPP funding to local
project participants and stakeholders. Funds have previously been provided to water and sewer
districts for watershed conservation projects.
RCPP funding is allocated at the national level, state level, and for critical conservation areas
such as the Great Lakes, Mississippi River watershed, and Chesapeake Bay. State entities
administer state-specific funds. A project can be eligible for funding at all levels. Funding is
provided in accordance with the rules of EQIP, the Conservation Stewardship Program, and
other USDA conservation programs.
http://www.nrcs.usda.gov/wps/portal/nrcs/main/national/programs/farmbill/rcpp/
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NRCS Innovation Grants
The National Resource Conservation Service provides agricultural land conservation grants for
the development and implementation of innovative approaches and technologies. Funds are
originated from the Environmental Quality Incentives Program (EQIP), so entities seeking NRCS
Innovation Grants must also be EQIP eligible. The new funding distribution approach allocates
grants by focusing on specific natural resources priorities, with a different focus each year.
Additional funding is allocated through a state competition for projects that only benefit a
limited geographic area. There are historical and current Innovation Grants relevant to harmful
algal blooms, including water methods for water quality trading valuations and innovative
management practices for nutrient reduction.
http://www.nrcs.usda.gov/wps/portal/nrcs/main/national/programs/financial/cig/7utm sourc
e=Funding+Supplement
Source Reduction Assistance Grant Program
Grants support pollution prevention activities through source reduction and resource
conservation. Projects must include one or more of the following components: surveys, studies,
research, investigation, experimentation, education, and training and/or demonstrations. The
majority of funds are provided to government entities that use the funds to provide technical
assistance and education to stakeholders. The grants are generally focused on hazardous waste
and contaminants, and not on nutrients and nonpoint source reduction efforts.
https://www.epa.gov/p2/grant-programs-pollution-prevention
Community Development Block Grant (CDBG)
The Community Development Block Grant program provides funds for a wide range of
community development needs, with the mission to encourage urban revitalization and
development in underserved communities. At least 70% of the funds provided for a project
must be used on initiatives that benefit low- to moderate-income persons, and all projects must
meet one of the following objectives: benefit underserved communities, prevent or eliminate
slums or blight, or address critical community development needs if existing conditions pose an
immediate threat to public health. Funded development projects must include a construction
or restoration project that aids in revitalizing a depressed neighborhood or assisting low- to
moderate-income individuals.
http://portal.hud.gov/hudportal/HUD?src=/program offices/comm planning/communitydevel
opment/programs
EPA's Urban Waters Small Grants
The mission of EPA's Urban Waters Program is to help local residents and their organizations,
particularly those in underserved communities, restore their urban waters in ways that also
benefit community and economic revitalization. These projects should address urban runoff
pollution through diverse partnerships that produce multiple community benefits, such as
protection of drinking water sources.
http://www.epa.gov/urbanwaters/urban-waters-small-grants
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Great Lakes Restoration Initiative
This Request for Application (RFA) is EPA's major competitive grant funding opportunity under
the Great Lakes Restoration Initiative. It is one of several funding opportunities available
through federal agencies under the GLRI.
Those who are available for funding under this grant include: nonfederal governmental entities,
including, state agencies, interstate agencies, federally recognized Indian tribes and tribal
organizations, local governments, institutions of higher learning (i.e., colleges and universities),
and non-profit organizations as defined in 2 C.F.R. § 200.
https://www.epa.gov/great-lakes-funding/great-lakes-restoration-initiative-2016-rfa
Source Water Collaborative (SWC)
Comprised of federal, state, and local partners, the SWC provides information on funding
options; including: funding for surface water protection, funding for emergency response, and a
cost/benefit calculator tool.
http://sourcewatercollaborative.org/assess-protect-drinking-water-sources/find-funding/
Additional State Funding Sources
In addition to federal funding sources, there are also state-level funding programs for HAB
testing equipment and treatment infrastructure improvements. Some states also have access to
other state funding programs related to water pollution control and public health protection in
addition to the DWSRF and CWSRF programs. Eligible projects in many states include drinking
water and wastewater infrastructure construction and system upgrades, habitat and watershed
restoration, and agriculture/forestry best management practices for pollution prevention.
Funding from state environmental offices such as DEQ or a state EPA can include nutrient
control initiatives, monitoring efforts, and public communications/outreach support. A good
example of potential state funding is the Ohio EPA HAB funding.
http://www.epa.state.oh.us/HAB funding.aspx
FOR MORE INFORMATION...
EPA's Ground Water and Drinking

DWSRF Website:
Water Cyanotoxins in Drinking

http://www2.epa.gov/drinkingwatersrf
Water:
Office of Ground Water and

https://www.epa.gov/ground-
Drinking Water (4606M)
CWSRF Website:
water-and-drinking-

http://www.epa.gov/cwsrf
water/cvanotoxins-drinking-water
SDWA Hotline
CyanoHABs Website:

1-800-426-4791

http://www.epa.gov/cvanohabs
EPA's Ground Water and Drinking


Water Website:
January 2017

http://water.epa.gov/drink/

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