State proposes $146 million to construct public water infrastructure



MONTPELIER - The Department of Environmental Conservation (DEC) is proposing to offer $146 million to help communities make improvements to water, wastewater, and stormwater infrastructure. The funding would allow communities to make major infrastructure improvements while keeping costs affordable for users.  The money is available in the form of low- and no-cost loans, many of which include substantial loan principal forgiveness. Funding through the State Revolving Fund (SRF) is available to municipalities, non-profit and private community water and wastewater systems.

The proposal is outlined in the draft Intended Use Plans (IUPs) for the Drinking Water and Clean Water State Revolving Loan Funds (DWSRF and CWSRF). In response to the COVID-19 pandemic, the IUPs also suspended loan repayments on existing loans. After a public hearing and receipt of public comments, the final IUPs will be released on July 16.

“This funding will support critical infrastructure projects that will boost Vermont’s economy and protect public health at a time when we need it most,” said DEC Commissioner Peter Walke. “The SRF loans will not only support local jobs and build the infrastructure we need to support a prosperous future, they will also provide safe drinking water and result in cleaner lakes and streams.”

The money can be used for projects such as treatment plant refurbishment, distribution and collection system improvements for drinking water, wastewater (sewage), and stormwater, and natural infrastructure projects such as land conservation and dam removals to address non-point sources of pollution. The impacts of SRF projects can be profound, from removing a dangerous chemical contaminant like PFAS from public drinking water supplies to eliminating combined sewer overflows to restoring a floodplain. 

The DWSRF and CWSRF loans are geared towards affordability, with interest and administrative fees as low as 0% and very generous loan principal forgiveness. Of the $146M available, approximately $40 million will go toward loan principal forgiveness for projects, which means that many communities may only have to pay back a portion of their project costs.

“If a community takes out a $5 million loan to rebuild their water treatment plant through DWSRF, they would receive 75% loan forgiveness on the first $1M and 25% on the rest, meaning $1.75M would be forgiven. If they meet disadvantaged criteria, they could get another $2M forgiven. They get a $5M project for only $1.25M, which they can pay back over as many as 40 years,” said Terisa Thomas, DEC’s Water Finance Program Manager.

Public comment on the draft IUPs is welcome. Anyone can provide comments at until July 2, 2020. Both the DWSRF and CWSRF offer significant forgiveness terms for all planning stages of projects including feasibility assessments, preliminary engineering, and final design.

The CWSRF and DWSRF are part of DEC’s work to coordinate water investment using state and federal funding to support water infrastructure projects in Vermont. More information on additional subsidies, loan forgiveness, and a list of approved project types are available here.