Access to safe, clean drinking water is one of the hallmarks of modern society. Here at the Louisiana Department of Health, we have a whole team dedicated to making sure that drinking water systems in the state are doing their jobs in providing clean water to their customers. One program in particular assists water systems in their quest to improve water quality: the Drinking Water Revolving Loan Fund.
The Drinking Water Revolving Loan Fund is the Louisiana component of the Environmental Protection Agency’s Drinking WaterState Revolving Fund. This was established by Congress in 1996 to give states the financial means to assist water systems in complying with the federal SafeDrinking Water Act.
Both public and privately-owned community water systems and nonprofit, non-community water systems are eligible to apply for loans. Once a loan has been approved, water systems can use the funds to make necessary improvements. As the systems pay back the loans, the principal and interest are used to make more money available for loans to other communities. All projects funded by these loans are approved based upon a priority ranking system. Among other factors, projects that address the most serious risks to human health and those that ensure compliance with the federal Safe Drinking Water Act are given the highest priority.
Since its inception, the Drinking Water Revolving Loan Fund has provided 146 loans to 82 Louisiana water systems, with an average loan value of $2.3 million. Water systems use these loans to make critical improvements to infrastructure, which helps maintain the quality of the drinking water. For example, the loan may be used to improve drinking water treatment, fix leaky or old pipes, improve the source of water supply, or replace water tanks. In Fiscal Year 2017 alone, the program has already loaned $7.5 million to five water systems.
One of the key strengths of the program is the affordability to communities. Loans made through the program have low interest rates and repayment periods capped at 20 years. Additionally, the Fiscal Year 2016 Drinking Water Capitalization Grant allowed for additional subsidies in the form of principal forgiveness of up to 20 percent of the loan’s principal, with a cap of $500,000 of principal forgiveness per project.
For more information about the Drinking Water Revolving Loan Fund contact Jennifer Wilson at 225-342-7499.