Increasing the Likelihood of Accessing Infrastructure Funding
An unprecedented level of infrastructure funding will be offered for drinking water, but utilities will need to be proactive to have the best chance at accessing this funding.
Posted on February 28, 2023 Glenn Barnes
The Bipartisan Infrastructure Law has brought a “once-in-a-generation” investment from the federal government to the water and wastewater sector, with billions of dollars available for needed capital projects. As a utility, you may think it’s reasonable to assume that funding will be available for you when you request it. Sadly, that may not be the case.
Over the next 5 years, the Drinking Water sector will receive an additional $11.7 billion for infrastructure projects, an additional $15 billion for lead service line inventory and replacement, and an additional $9 billion for emerging contaminants like PFAS. Significant amounts of this funding will be offered as grants to small and disadvantaged communities. This is indeed an unprecedented level of funding for drinking water, but it is not nearly enough to cover the anticipated need. Lead service line replacements alone are estimated to cost between $28 billion to $47 billion. EPA’s most recent Drinking Water Infrastructure Needs Survey and Assessment shows $472.6 billion is needed to maintain and improve the nation’s drinking water infrastructure over the next 20 years, and those numbers were calculated before COVID, before last year’s high inflation, and before new regulatory requirements like the Lead and Copper Rule revisions. This funding is not a guarantee, especially as more utilities than ever apply for the money.
You will have to be proactive to put your utility in the best position to access funding. Otherwise, you run the risk of missing out. The best way to increase the likelihood of getting your application funded is to tailor the application to the funding program’s ranking criteria.
Most of the money from the Bipartisan Infrastructure Law is being channeled to utilities through the State Revolving Fund (SRF) program. Every state runs its own program, as well as the District of Columbia and Puerto Rico. Each of these programs scores its applications differently. Once all applications have been received and scored, programs fund the applications that receive the highest scores.
What do we mean by tailoring the application to the ranking criteria? Let’s look at an example from Massachusetts. Their Drinking Water SRF program asks applicants to prepare a 5-10 page narrative that addresses the following topics:
- A detailed discussion of the problem to be solved by the project.
- Identification of the project area using a site plan and/or locus map.
- A detailed discussion of the severity of the existing public health issues due to the problem.
- The total system population and the population affected by the project. Discuss how the affected population is calculated.
- A description of the relative importance of the component(s) involved.
- A discussion of all interactions with regulatory bodies pertaining to the problem, including the need to comply with existing enforcement orders or sanitary survey requirements.
- A discussion of options considered, such as but not limited to interconnections, blending to improve water quality, re-routing water mains, treatment, new source(s), including the no action option.
- A description of the backup systems currently in place to replace the component(s) on a temporary or permanent basis
- A description of all planning efforts performed to arrive at the recommended plan.
- A detailed discussion of the work to be completed
- A description of the energy efficiency measures to be implemented and anticipated energy savings.
- A description of any renewable energy components and an estimate of energy generation
- A description of any “new technologies” being used and approved by MassDEP.
- A discussion of the status of the project as it currently exists.
An application that is tailored to the scoring criteria would address each of these topics in order. A best practice would be to have headers that make it clear which topic is being addressed. For example, the header for the topic “A detailed discussion of the problem to be solved by the project” should be something like “Discussion of the problem to be solved by the project.” Make it as easy as possible for the reviewers to understand what you are addressing in the application!
There can be a significant difference in how states score funding applications. Virginia, for example, awards the bulk of its points in the scoring criteria based on how the project will improve public health, whist, next door, North Carolina awards more points based on affordability considerations and whether the project will consolidate a non-viable utility. The best resource for ranking criteria and all necessary information about SRF programs is the State Revolving Fund Switchboard created by the Southwest Environmental Finance Center. Navigate to the site, click on your state, and links are provided to all key documents for both the Drinking Water and Clean Water SRF programs.
With the ranking criteria in mind, you are more likely to write a successful application and take advantage of this once-in-a-generation investment in our country’s infrastructure.
Glenn Barnes, Director of Water Finance Assistance
Glenn Barnes is director of Water Finance Assistance, a training and technical assistance organization dedicated to helping you serve your community better and sustain your utility for years to come by building your financial and managerial capacity. Glenn leads workshops and webinars and works directly with water utilities on a range of financial and managerial topics including accessing infrastructure funding, rate setting, data driven decision making, workforce issues, and affordability. Water Finance Assistance is a partner to 120 Water on the funding of lead service line replacement.