Asset Management Plans and the Clean Water State Revolving Fund

Asset management is the foundation for understanding near- and long-term operational and capital needs.
Asset management plans provide a clear picture of infra structure-related expenses and future investment
needs, which inform financial planning. EPA's Clean Water State Revolving Fund (CWSRF) is a source of
financing for wastewater utilities' asset management planning efforts as well as capital expenditures.
Asset management practices center around developing detailed asset inventories, performing operation and
maintenance (O&M) tasks, and developing capital improvement plans. While these practices are often done
individually, they can inform each other when organized into an asset management plan. The complexity of
asset management plans can vary, but plans commonly include:
• Asset lists and/or maps that document the age, location, condition, criticality, and remaining useful
life of the assets;
• O&M strategies that include standard operating procedures and emergency operating procedures, as
well as the schedule and costs of routine, preventative, and deferred maintenance of the assets;
• Capital improvement planning to determine short-term and long-term asset rehabilitation and
replacement projections based on the asset inventory, O&M data, and alternative strategies; and
• Staffing strategies and measurable level of service goals.
How the CWSRFs Work
The CWSRF program is an effective partnership between EPA and the states that offers flexibility to fund
a variety of projects that address states' highest priority water quality needs. The programs in each state
and Puerto Rico operate like banks. Federal and state contributions are used to capitalize the programs and
these funds are used to make low-interest loans for projects that improve water quality and help protect
the environment and public health. Funds are then repaid to the CWSRFs over terms as long as 30 years1.
Repayments are made available to finance additional projects.

1 When appropriate, the CWSRFs can provide extended term financing beyond 30 years by purchasing or refinancing
municipal debt obligations.
Page 1

-------
Financial Benefits of CWSRF Funding
CWSRF assistance options deliver significant
benefits to prospective borrowers. Incentives
may vary by state. CWSRF loans can provide
the following benefits:
•	Coverage of up to 100 percent of project
costs;
•	Discounted loans below the market rate
down to zero percent in some states;
•	Deferred payments of principal and/or
interest;
•	Terms of up to 30 years and extended term
financing that reduces annual interest
payments;
•	Dedicated revenues for loan repayments
that can come from any source;
•	Reliable access to capital through the use of
programmatic, portfolio, and cofinancing;
•	Access to additional subsidies;
•	Credit enhancements that lower the cost of
borrowing for less than AAA green debt
obligations; and
•	Access to affordable assistance for project
development, planning, and technical
assistance.
forgiveness on loans, priority and bonus points on applications, and lower interest rates on loans. This can
be especially helpful for disadvantaged communities and others with limited capacity. The availability of
incentives varies from state to state.
Indiana
In 2018, the Indiana General Assembly passed a law requiring
recipients of Indiana CWSRF and Drinking Water State Revolving Fund
financial assistance to certify they have documentation, such as an
asset management plan, that demonstrates they have the financial,
managerial, technical, and legal capability to operate and maintain
drinking water or wastewater distribution/collection and treatment
system. To help recipients comply with this requirement, the Indiana
SRF program provides State grant funding for utilities to establish asset
management plans. To date, Indiana has provided $600,000 in State
grant funds to 24 SRF recipients to establish asset management plans.
For more information on how Indiana assists their communities with an
asset management plan, please visit: https://www.in.gov/ifa/srf/2376.
htm.
Success Story: The Town of Prince's Lakes
The Town of Prince's Lakes received $2,341,000 in financial assistance
from the Indiana CWSRF for wastewater collection system and
treatment plant improvements to meet effluent limits and improve
Getting a Project Funded
EPA encourages states to consider funding a wide variety of
eligible water quality and public health projects. Utilities and
municipalities may seek out their state's CWSRF program to
learn more about funding opportunities and the process for
determining project eligibility. The list of state programs can
be found at: https://www.epa.gov/cwsrf.
The CWSRF and Asset Management
To encourage asset management planning by utilities, the
Clean Water Act, as amended by the Water Resources Reform
and Development Act of 2014, requires any publicly owned
treatment works (POTWs) that receives a CWSRF loan to
develop a Fiscal Sustainability Plan (FSP). FSP's include many
of the same components of an asset management plan. To
assist borrowers with meeting requirements, CWSRF programs
distribute guidance documents and provide training and on-
site technical assistance on asset management planning and
FSP development.
Learning By Example
State CWSRF programs may offer incentives to their borrowers
for the development of an asset management plan or FSP,
including financing for asset management planning, principal
www.allcranaooro
Photo Courtesy of the
Indiana Finance Authority
Page 2

-------
system efficiency. The Town also received a $25,000 State grant for the deveiopement of an asset management
plan, which will include the Town's collection system and wastewater treatment plant. Through the asset
management planning process, the Town will inventory and regularly assess the condition of its system,
enabling them to forecast their future maintenance costs more efficienty.
New Hampshire
The New Hampshire CWSRF encourages borrowers to develop an asset
management plan by offering loan forgiveness for this activity. The
program can provide 100 percent loan forgiveness for up to $30,000
per approved phase of work. To date, the New Hampshire CWSRF has
committed approximately $2,600,000 to asset management projects
and anticipates providing an additional $2,000,000 in the near future.
Of the 92 communities with sewer systems in New Hampshire, more
than half of them incorporate asset management work. The New
Hampshire CWSRF offers an asset management workshop each year
that brings communities together with service providers and other
experts. New Hampshire communities are engaged in the development
of asset management plans and often participate in project kick-off
meetings, level-of-service meetings, and wrap-up meetings.
Success Story: The Town of Pembroke
The Town of Pembroke received an $800,000 loan from the New
Hampshire CWSRF for the replacement of the Bow Lane Pump Station
and the development of an asset management plan for the entire
wastewater collection system. By replacing the original pump station
and installing a new generator to provide back-up power, the risk of
overflow and discharge of untreated wastewater to the surrounding
area will be reduced, and the safety and the environmental risk for the
operators of the community will be eliminated.
The Town received $30,000 in principal forgiveness to develop
an asset management plan for their entire collection system.
Through the development process, the life cycle costs of critical
assets were evaluated and a funding strategy for asset maintencance
and replacement was developed. The plan is helping staff proactively
manage their wastewater asset inventory. It includes a mechanism to
review and update the defined level-of-service at a regular interval,
which helps provide transparency between the Town of Pembroke staff,
sewer commissioners, and sewer users. The final steps of the asset
management plan are to develop and implement a communication
plan, which seeks to improve communication among the stakeholders
and define the responsibilities for continued use of the asset
mananagement plan.
Photos Courtesy of New Hampshire
Department of Environmental Services
For
more information about the CWSRF please contact us at:
Clean Water
State Revolving Fund

United States Environmental Protection Agency
Clean Water State Revolving Fund Branch
Office of Water, Office of Wastewater Management
1200 Pennsylvania Avenue, NW (mail code 4202M)
Washington, DC 20460
EPA 832F20003 FEBRUARY 2021

-------