2019 CWSRF Financial Overview The Clean Water Act requires an annual financial audit of the state CWSRF programs. Each state and Puerto Rico conduct these audits according to the Generally Accepted Accounting Standards (GAAP) established by the Governmental Accounting Standards Board (GASB). States often define their CWRSF programs as ongoing enterprise funds under the GASB definitions of funds. 2019 Financial Highlights • The 51 CWSRF programs provided over $6.2 billion in funding for high priority water infrastructure and other water quality projects. Cumulatively, since the program's inception, CWSRF programs have provided over $138 billion in assistance, mainly in the form of low-cost financing, to a wide range of eligible borrowers. • Since 2009, approximately $5.1 billion has been provided as additional subsidy in the form of direct grants and principal forgiveness. Over $260 million was provided in 2019 alone. • Total assets are approximately $74 billion. This is a $2 billion increase from the previous year. • Net assets have exceeded $53 billion. This is a $2 billion increase from the previous year. • Federal capitalization in 2019 was nearly $1.9 billion. • Operating revenues exceeded operating expenses by over $230 million. • Annual earnings from loans and investments exceeded $1.4 billion. • The CWSRF issued over $1.8 billion in leveraged bonds to provide additional funding for projects. National aggregate financial statements were developed using data entered in EPA's National Information Management System between July 1, 2018 and June 30, 2019. Because the 51 CWSRF programs are independent state-level entities, no nationally audited CWSRF program financial reports are available. The financial statements are non-audited, cash-based financial reports. The four statements are described below. Statement of Fund Activity (Page 2) Provides an overview of major indicators of fund activity, including capitalization grant levels, project commitments, project disbursements, and subsidies provided. Both annual and cumulative data are given. Statement of Revenues, Expenses, and Earnings (Page 3) Describes the overall performance of the CWSRF fund over the reporting period that is reflected in the increase or decrease in net assets. Statement of Cash Flows (Page 4) Provides a detailed accounting of the actual flow of cash into and out of the CWSRF fund. Statement of Net Assets (Page 5) Describes CWSRF 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 assets include grant funds that have been drawn from the federal treasury to date, but do not include total grant awards. CWSRF assets also include state matching contributions that have been deposited in the fund. 2019 CWSRF Financial Statements | Page 1 ------- Statement of Fund Activity (Millions of Dollars) Annual Fund Activity FY 2018 FY 2019 Federai Capitalization Grants $1,364.5 $1,869.9 State Matching Funds $538.4 $300.7 New Funds Available for Assistance $6,561.8 $7,549.5 Executed Assistance Agreements $6,727.9 6,241.8 Project Disbursements $6,255.6 $6,535.0 Cash Draws from Federal Capitalization Grants $1,225.7 $1,585.4 Total Annual Subsidy $257.2 $264.1 Grants $20.0 $12.4 Negative interest 0.0 0.00 Principal Forgiveness $237.3 $251.6 Cumulative Fund Activity Federal Capitalization Grants $43,343.2 $45,213.2 State Matching Funds $8,585.8 $8,886.5 Funds Available for Assistance $134,397.9 $142,947.3 Executed Assistance Agreements 132,208.8 138,450.6 Project Disbursements $116,444.7 $122,979.7 Cash Draws from Federal Capitalization Grants $41,734.6 $43,319.9 Total Cumulative Subsidy $4,849.8 $5,123.9 Grants $655.2 $667.6 Negative Interest 0.0 0.0 Principal Forgiveness $4,204.6 $4,456.2 I II I 2019 CWSRF Financial Statements | Page 2 ------- Statement of Revenues, Expenses, and Earnings (Millions of Dollars) Operating Revenues FY 2018 FY 2019 Interest on Investments $343.5 $471,9 Interest on Loans $1,002.6 $991.3 Total Operating Revenues $1,346.1 $1,463.2 Operating Expenses Bond Interest Expense $913.8 $894.1 Amortized Bond Issuance Expense $27.0 $19.6 Administrative Expenses $49.0 $53.8 Additional Subsidy Provided $257.2 $264.1 Total Expenses $1,247.1 $1,231.6 Nonoperating Revenues and Expenses Federal Contribution (Cash Draws) $1,225.7 $1,585.4 State Contributions $145.7 $175.5 Transfers from (to) DWSRF ($61.4) $2.0 Total Nonoperating Revenues (Expenses) $1,310.0 $1,762.9 Increase (Decrease) in Net Assets $1,409.0 $1,994.5 Net Assets Beginning of Year $49,887.1 $51,296.1 End of Year $51,296.1 $53,290.6 2019 CWSRF Financial Statements | Page 3 ------- Statement of Cash Flows (Millions of Dollars) Operating Activities FY 2018 FY 2019 Cash Draws from Federal Capitalization Grants $1,225.7 $1,585.4 Contributions from States $145.7 $175.5 Loan Disbursements (Including Additional Subsidy) ($6,255.6) ($6,535.0) Loan Principal Repayments $4,109.5 $4,124.5 Interest Received on Loans $$1,002.6 $991.3 Administrative Expenses ($49.0) ($53.8) Total Cash Flows from Operating Activities $178.9 $287.8 Noncapital Financing Activities Gross Leveraged Bond Proceeds $1,9262.8 $1,827.1 Bond Issuance Expense ($13.3) ($10.9) State Match Bond Proceeds $392.8 $125.3 Cash Received from Transfers with DWSRF ($61.4) $2.0 Interest Paid on Leveraged and State Match Bonds ($913.8) ($894.1) CWSRF Funds Used for Refunding 0.0 ($151.2) Principal Repayment of Leveraged Bonds ($2,102.4) ($1,618.1) Principal Repayment of State Match Bonds ($133.4) ($90.2) Net Cash Provided by Noncapital Financing Activities ($868.6) ($810.1) Investing Activities Interest Received on Investments $343.5 $471.9 Release (Deposit) of Leveraged Bond Debt Service Reserve $273.5 $464.3 Net Cash Provided by Investing Activities $617.0 $936.3 Net Increase (Decrease) in Cash and Cash Equivalents ($72.8) $414.0 Cash and Cash Equivalents Beginning of Year $13,978.9 $13,906.1 End of Year $13,906.1 $14,320.1 2019 CWSRF Financial Statements | Page 4 ------- Statement of Net Assets (Millions of Dollars) Assets FY 2018 FY 2019 Cash arid Cash Equivalents $13,906.1 $14,320.1 Debt Service Reserve - Leveraged Bonds $3,218.4 $2,754.1 Loans Outstanding $54,772.4 $56,918.9 Unamortized Bond Issuance Expenses* $243.0 $234.2 Total Assets $72,139.9 $74,227.3 Liabilities Match Bonds Outstanding $861.6 $896.7 Leveraged Bonds Outstanding $19,982.2 $20,040.0 Total Liabilities $20,843.8 $20,936.7 Net Assets Federal Contributions (Cash Draws) $41,734.6 $43,319.9 State Contributions $5,973.2 $6,148.6 Transfers - Other SRF Funds ($590.2) ($588.2) Other Net Assets $4,178.6 $$4,410.2 Total Net Assets $51,296.1 53,290.6 Total Liabilities and Net Assets $72,139.9 $74,227.3 * 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. 2019 CWSRF Financial Statements | Page 5 ------- /////////// /1111H\\\\\\\\ State Agencies That Manage CWSRF Programs EPA Region 1 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 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 EPA Region 3 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 Development Authority West Virginia Department of Environmental Protection West Virginia Infrastructure and Jobs Development Council EPA Region 4 Alabama Department of Environmental Management Florida Department of Environmental Protection Georgia Environmental Facilities Authority Georgia Environmental Protection Division Kentucky Infrastructure Authority Kentucky Division of Water Mississippi Department of Environmental Quality North Carolina Department of Environmental 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 Illinois Environmental Protection Agency Indiana Department of Environmental Management Indiana Finance Authority Indiana State Budget Agency Michigan Department of Environmental Quality Michigan Municipal Bond Authority Minnesota Pollution Control Agency Minnesota Public Facilities Authority Minnesota Department of Agriculture Ohio Environmental Protection Agency Ohio Water Development Authority Wisconsin Department of Natural Resources Wisconsin Department of Administration EPA Region 6 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 2019 CWSRF Annual Report | Page 14 ------- EPA Region 7 Iowa Department of Natural Resources Iowa Finance Authority Kansas Department of Health and Environment 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 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 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 Alaska Department of Environmental Conservation Idaho Department of Environmental Quality Oregon Department of Environmental Quality Washington Department of Ecology For more information about the Clean Water State Revolving Fund: Please contact us at: To access state program websites, visit: Office of Wastewater Management WWW.eoa.eov/cwsrf Clean Water State Revolving Fund National Program 1200 Pennsylvania Avenue NW (4204M) Washington, DC 20460 CWSRF@epa.gov www.epa.gov/cwsrf Office of Water • July 2020 • EPA Publication 832R20001 -S.EPA 2019 CWSRF Annual Report | Page 15 Clean Water State Revolving Fund ------- |