Clean Water State Revolving Fund

Picture of part of wastewater system.

General Information

Missouri communities have borrowed more than $1.1 billion from these programs and have saved in excess of $330 million as opposed to conventional financing. The chart entitled Comparing "The Costs of Doing Business", illustrates how these savings are attained. The charges paid by local citizens can be substantially lower when SRF funding is used compared to conventionally financed construction.

The State Revolving Fund is a federally subsidized, low-interest, leveraged-loan program. Other programs include those funded by a state conservation sales tax. A municipality or sewer district desiring to build, expand, or improve their wastewater treatment facility can borrow money from one of these funds. The must first approve General Obligation or Revenue bonds to secure their proposed debt.

Bonds are purchased and resold nationally by a sub-unit of the department known as the Environmental Improvement and Energy Resources Authority (EIERA). The EIERA bonds are rated as AAA. Funds generated by the sale of the bonds are deposited with a trustee bank in the applicant's name and are used for construction.

The programs are available to municipalities, counties, public water and public sewer districts and political subdivisions. In some instances individuals, small business owners, and others in the private sector are eligible. To participate in the loan or grant programs, your project must appear on the Fiscal Year 2006 Clean Water SRF Intended Use Plan or State Grant Priority fundable lists.

Project proposals must be submitted to the Missouri Water and Wastewater Review Committee (MWWRC). The same forms can be used for the SRF leveraged loan program, the 40 percent grant/60 percent direct loan program, hardship grant and loan, and the small borrower loan program for construction of public wastewater systems. When the review is completed and the MWWRC has made its recommendation, an application will be forwarded to the applicant.

Applications are analyzed by the department to determine whether the applicant qualifies for the SRF leveraged loan or a 40 percent grant. This determination is based on the size of the community, projected user charge after project completion, and the financial capability and history of the community.

Assessment of the environmental impact of the project, based upon a mathematical formula, results in the assignment of "Priority Points." The Priority Points are used to determine the order in which project funds will be distributed; a project with high Priority Points (indicating a high level of environmental impact or need) will be funded before one with a lower Priority Point total.

Applicants that do not have high enough priority points to be listed on the fundable list, but are still able to meet the eligibility requirements will be placed on a contingency list. If an applicant on the fundable list drops out or does not use all of its identified funds, the applicant with the highest priority points on the contingency list will be moved to the appropriate fundable list. Applications are good for two years.

FY2006 Clean Water SRF Intended Use Plan and State Grant Priority Lists

Questions On Financing Public Wastewater Systems Through SRF

Q. Why was the Clean Water State Revolving Fund (SRF) Program established?
Q. Who administers the Missouri Clean Water SRF Program?
Q. How many programs are available under the State Revolving Fund?
Q. Under which program will my community be eligible for funding?
Q. What projects are eligible for SRF funding?
Q. How are projects evaluated?
Q. How will participation in the SRF Program help my community?
Q. What is the operating philosophy behind Missouri's SRF Program?
Q. How does my community apply for participation in the SRF program?
Q. When should design of my SRF project begin?

Q. Why was the Clean Water State Revolving Fund (SRF) Program established?

A. The Missouri SRF was established to replace the U.S. EPA/Missouri Department of Natural Resources Construction Grant Program that was phased out under the Federal Clean Water Act of 1987. The SRF is the state's primary vehicle for providing low-cost financing for wastewater collection and treatment facilities.

Q. Who administers the Missouri Clean Water SRF Program?

A. In order to receive the federal capitalization grants necessary to establish an SRF program, states delegated responsibility for administering the SRF to a state agency. In Missouri, the responsibility was delegated to the Missouri Department of Natural Resources.

Q. How many programs are available under the State Revolving Fund?

A. There are several programs offered using the State Revolving Fund. The direct loan program, offered to recipients of state 40 percent grants; the leveraged loan and interim direct loan program, which is offered to applicants having a larger population and good credit analysis; the non-point source loan programs, one of which is offered to livestock producers in cooperation with the Department of Natural Resources and the Missouri Agriculture and Small Business Development Authority. Another is offered to individuals required to construct deep water wells in designated areas of Jasper and Newton counties. The NPS loan program may also be used for other types of environmental need.

Q. Under which program will my community be eligible for funding?

A. Applicants that qualify for an Investment Quality bond rating or develop programs or procedures that satisfy the rating agency will be eligible for funding under the SRF Program. Applicants with lower bond ratings will be eligible to compete for grants under the State 40 Percent Construction Grants Program and may qualify for up to 60 percent financing through a direct loan. The Missouri Clean Water Commission makes the final determination during the Intended Use Plan public hearing. The non-point source program is offered to qualifying individual farmers with animal waste treatment needs and for individual home wastewater treatment needs.

Q. What projects are eligible for SRF funding?

A. Funding will be made available to finance the costs of planning, design, and construction of publicly owned wastewater collection and treatment systems or animal waste treatment facilities. Eligible projects must fall into one or more of the following categories:

Q. How are projects evaluated?

A. Projects will be evaluated and prioritized based on their environmental impact in accordance with the priority point formula established by regulation.

Q. How will participation in the SRF Program help my community?

A. The SRF program provides substantial savings over conventional project financing. Participation in the SRF can dramatically reduce your community's annual debt service costs. These savings will translate into lower costs for system users. (Cost Comparison)

Q. What is the operating philosophy behind Missouri's SRF Program?

A. In operating its SRF Program, Missouri has several main objectives. The first is to maximize Missouri's use of federal capitalization grant funds by encouraging wide participation in the SRF Program. The second is to provide as much funding, both from the federal capitalization grants and from state revenue sources, to as many communities as possible in order to enhance water quality and provide cost effective wastewater treatment. Lastly, Missouri prefers to provide financing through the SRF Program rather than through the State 40 Percent Construction Grants Program. This strategy will provide more effective use of federal funds and will provide an ongoing source of funding for the State's water pollution control needs.

Q. How does my community apply for participation in the SRF program?

A. Submit a completed Missouri Water and Wastewater Review Process Application. Following their review, the Missouri Water and Wastewater Review Committee (MWWRC) will recommend the appropriate state or federal agency for financial assistance. After receiving an invitation to apply to the CWSRF program, a completed CWSRF application form must be submitted to the Missouri Department of Natural Resources. The application must be postmarked on or before November 15 of each year. Faxed applications will not be accepted. Applications submitted by the deadline will be considered for the upcoming fiscal year. However, we will continue to collect late applications and list them on the contingency list in priority point order as long as the application is included in the public hearing process.

Q. When should design of my SRF project begin?

A. Once the project is shown as fundable on the Intended Use Plan, the city should contact the department concerning procurement procedures for engineering services. The engineer selected should first develop a facility plan. This plan will discuss the wastewater problems, possible solutions, the cost associated with each solution and a recommendation. The city must be sure that this document is submitted and approved by the department prior to authorizing development of detailed plans and specifications.