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Sustainable Infrastructure Needs–Community Solutions through the

Drinking Water & Clean Water State Revolving Funds

Jerry Rouch, Ohio EPA DEFASustainability Conference

April 17, 2019

Infrastructure Needs

• What are the Infrastructure Needs?

– Drinking Water

• pipes that distribute drinking water, tanks to store treated water, and the technology that treats the water so that it is safe to consume.

– Wastewater and Stormwater

• pipes that carry wastewater to treatment plants, the technology that treats the wastewater prior to discharge, as well as methods for managing stormwater runoff.

Infrastructure Needs

Infrastructure Needs

Estimate of Ohio’s20-year Infrastructure Needs

Clean Watersheds Needs Survey – January 2016

$14.5 Billion

Drinking Water Needs Survey – April 2013

$12.2 Billion

Great Lakes Region20-year Infrastructure Needs

Average Ohio Sewer and Inflation Rates

Sustainable Infrastructure

Sustainable Communities rely on Sustainable Infrastructure

• Basic Human Needs

• Industry and Commerce

• Schools and Institutions

• Development and Economic Growth

• Stability of assets and expected costs

Sustainable InfrastructureU.S. EPA Policy on Sustainable Infrastructure

Sustainable water infrastructure is critical to providing the American public with clean and safe water. Further, water infrastructure can only be sustainable if the communities it serves are sustainable, and if local decision makers and citizens understand the value of water infrastructure and the services provided. Federal investments, policies, and actions should support water infrastructure in more efficient and sustainable locations to best support existing communities, enhance economic competitiveness, and promote affordable neighborhoods.

Sustainable Infrastructure

Asset Management is the tool that results in Sustainable Infrastructure

Asset ManagementAsset management is the practice of managing infrastructure capital assets to minimize the total cost of owning and operating these assets while delivering the desired service levels. Many utilities use asset management to pursue and achieve sustainable infrastructure. A high-performing asset management program includes detailed asset inventories, operation and maintenance tasks, and long-range financial planning.

The Elements of Asset Management

The five core questions of Asset Management:

1. What is the current state of the assets?

2. What is the required "sustainable" level of service?

3. Which assets are critical to sustained performance?

4. What are the minimum life-cycle costs?

5. What is the best long-term funding strategy?

Benefits of Asset Management• Prolonging asset life and improving decisions about asset

rehabilitation, repair, and replacement.• Meeting consumer demands with a focus on system

sustainability.• Setting rates based on sound operational and financial

planning.• Budgeting focused on critical activities for sustained

performance.• Meeting service expectations and regulatory requirements.• Improving responses to emergencies.• Improving the security and safety of assets.• Reducing overall costs for both operations and capital

expenditures.

Financial Support for Asset Management Planning

Year Funds Awarded# Asset Management

Plans

2017 $10,000 2

2018 $110,000 11

2019 (awarded) $479,400 48

2019 (to be awarded) $197,500 20

Totals $796,900 81

Principal Forgiveness Funds Awarded for Asset Management Planning

Estimate of Ohio’s20-year Infrastructure Needs

Clean Watersheds Needs Survey – January 2016

$14.5 Billion

Drinking Water Needs Survey – April 2013

$12.2 Billion

Financing Infrastructure Needs

Where can Communities get access to capital to Replace and Expand their Infrastructure?

• Bond Financing

• State Revolving Fund (SRF) Programs

• Other State Loan Programs

• State or Federal Grants

Water Pollution Control Loan Fund (WPCLF)

WPCLF provides funding to public wastewater systems for planning, design and construction of wastewater systems.

Water Supply Revolving Loan Account (WSRLA) WSRLA provides funding to public water systems for planning, design, and construction of drinking water systems.

State Revolving Funds

State Revolving FundsWPCLF WSRLA

This is what we have accomplished over 30 years

First Loan Sept. 1989 Feb. 1999

Total Loans Over 2,300 Projects Over 738 Projects

Total Investment In Ohio Over $ 9.1 Billion Over $ 1.5 Billion

Total estimated Savings for Communities

$1.3 Billion $220 Million

SustainableAnnual Capacity

Over $500 million/year

$150 million/year

Annual Funding Levels from Ohio EPA Revolving Loan Fund Programs

Snapshot of Financial Assistance (2018)

Program # of Awards Funds Awarded

Water Supply Revolving Loan Account (WSRLA)

96 $233,412,400

Water Pollution Control Loan Fund (WPCLF)

167 $552,105,065

Water Resource Restoration Sponsor Program (WRRSP)

10 $11,608,269

Total 273 $797,125,734

WPCLF and WSRLA – Wide Range of Projects and Applicants

WPCLF WSRLA

Smallest Loan $4,500 $7,000

Largest Loan $285 Million $31 Million

Average Loan $3.9 Million $2.2 Million

State Revolving Funds

Eligible Loan Recipients

WPCLF WSRLAFor wastewater treatment: any municipality or other political subdivision, or inter-municipal, interstate, or State agency

Community Water Systems

Non-profit, Non-Community Public Water Systems

For Nonpoint Source Pollution Control Projects: Public or private entities.

Water Supply Revolving Loan Account

Eligible Projects Include:

New water treatment plants Water treatment plant rehab

New waterlines Waterline rehab/replace

Water tanks/towers Pump/booster stations

Regionalization projects New water meters

Standby/back-up power New well fields

Emergency interconnections Asset Management Plans

Water Pollution Control Loan Fund

Eligible Projects Include:

• New wastewater treatment plants (WWTP)

• WWTP upgrades and rehabilitation

• New sanitary sewers for unsewered areas

• Sanitary sewer rehabilitation or replacement

• CSOs (New Incentives)

• Nutrient Reduction (Incentive)

• NPS Projects:

– Stream protection and stream restoration

– Landfill closure

– HSTS replacement programs

WPCLF/WSRLA Interest Structure

Category Terms

Standard Market rates minus 1.25%

Small Community Market rates minus 1.75%

Hardship 1%

Hardship 0%

Principal Forgiveness Available during 2019

Lower Interest Rates = Big $avingsCompared to market rates, savings are substantial

Example $1 million loan (December 2018 rates)

Interest Rate Total Repayments Savings vs. Market

Market (3.64%) $1,416,465 ---------------

Standard (2.39%) $1,263,819 $152,646

Small (1.89%) $1,205,540 $210,925

Hardship (1%) $1,105,820 $310,645

Hardship (0%) $1,000,000 $416,465

Additional Discounts & Features Available

WPCLF

• CSO Discount

• Nutrient Reduction Discount

• Regionalization Discount

• WRRSP Sponsorship

• 0% for planning & design

• Extended Terms Available

• Principal Forgiveness➢ Home Sewage

➢ Unsewered Areas

WSRLA• HAB Discount

• Regionalization Projects (75% PF)

• Human Health Projects (75% PF)

• Disadvantaged Comm. (50% PF)

• Targeted Funds➢ Asset Management

➢ Emergency Connections

➢ Gaseous Chlorine Conversion

Water Pollution Control Loan Fund (WPCLF)

Bubble Plot of Loan Recipients

547 Entities

$9.1 Billion

Infrastructure Financing through the WPCLF and WSRLA

• Sustainable Communities rely on sustainable infrastructure

• Ohio’s water and sewer infrastructure needs are exceed $28 billion

• Ohio’s communities need to finance capital improvements

• Ohio’s WPCLF and WSRLA are the major source of infrastructure funding in Ohio

How Ohio EPA Supports Sustainable Infrastructure

• Providing technical assistance for cost-effective, environmentally-sound solutions

• Reviewing for financial sustainability

• Promoting asset management, shared services, and regional solutions

• Providing incentives for new initiatives

• Funding capital improvement needs throughout Ohio

Questions?

Jerry Rouch

Ohio EPA Division of Environmental & Financial Assistance

Jerome.Rouch@epa.ohio.gov

(614) 644-2798