Last week, the Associated Press reported that millions are stagnating in Drinking Water State Revolving Fund accounts as of Aug. 1, despite huge budget gaps and demand that far exceeds what’s in the coffers.
Project delays, poor management by some states and structural problems are a few of the reasons that approximately $1.1 billion is in limbo.
State managers say that some spending delays cannot be helped: Water projects are complex and take years to design and build; cities may reject rate increases and cancel plans; and projects can get mired in lengthy environmental studies or design/bidding stages.
The fund provides loans rather than grants, which means money gets repaid through water system revenues over time, making it financially sustainable—but the loan vs. grant method can hinder projects in small towns or rural areas, where town managers say they would have to raise rates to unaffordable levels to repay loans.
Additionally, states are using an increasing share of money to pay salaries instead of repair or replace pipe, deteriorating treatment plants and century-old storage tanks. Using the funds to pay salaries is allowed, but leaves less for infrastructure improvements and community health benefits, and some see it as robbing Peter to pay Paul.
In recent years, lawmakers have approved $900 million annually for the program, but they are considering a deep cut for next year.
Has your utility met any challenges in using your DWSRF funds for new projects, upgrades or repairs? Email us at [email protected] and let us know.
