MDEQ Announces A ‘Second Call' For Projects – Over $60M Available In Drinking Water Infrastructure Loans

The Michigan Department of Environmental Quality (MDEQ) is soliciting for more Drinking Water Revolving Fund (DWRF) projects to receive below market rate loan financing in the present fiscal year (FY) 2019. There is substantially more DWRF loan funding available than the currently demonstrated $53M demand for FY 2019 drinking water infrastructure projects. Fund resources could support over $60M in additional drinking water project loans for a combined total in excess of $113M inside FY 2019.

Eligible drinking water infrastructure projects for this “second call” of DWRF loan applicants are those that will address an identified public health threat, such as lead, per- and polyfluoroalkyl substances (PFAS), or other contaminants.

An Intent-to-Apply form for this “second call” is due no later than January 14, 2019, and the final DWRF project plans are due no later than March 15, 2019. Following receipt and review of the final DWRF project plans, the MDEQ will amend the FY 2019 Intended Use Plan (IUP) and make it available to the public before issuing the final document.

Some principal forgiveness is expected to be allocated to disadvantaged communities, as in the September 2018 IUP, and potentially to projects addressing contamination. The MDEQ’s final determination will be made once additional projects and cost estimates are known. Projects on the September 2018 IUP will not see a decrease in their principal forgiveness amount. Some projects may be offered new/additional principal forgiveness.

The DWRF provides low-interest loan financing for necessary public drinking water facility improvements to enhance water quality and protect public health. The 21st Century Infrastructure Commission reported an $800M annual gap in funding water-related infrastructure needs. The DWRF is an opportunity to help narrow that gap through interest rates below those otherwise available on the open market and opportunities to receive principal loan forgiveness. Participation in the DWRF loan program also allows communities to pass the savings along to their system customer base.

The DWRF was established in 1997 and has since provided below market rate loan financing totaling $980M for drinking water infrastructure projects. A portion of the DWRF is provided by the United States Environmental Protection Agency through capitalization grants. The MDEQ is working on proposals to improve the DWRF based upon recommendations of the 21st Century Infrastructure Commission, as well as stakeholder feedback, in order to enhance opportunities for communities to access capital funds necessary to improve Michigan’s water-related infrastructure.

The MDEQ has developed educational videos to help communities that are interested in obtaining funding from the DWRF prepare a quality final project plan.

For more information on the DWRF loan program visit: www.michigan.gov/drinkingwaterrevolvingfund.