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2014-01-23

Strategy approved for reducing federal funds

Contributed

The Texas Water Development Board (TWDB) recently approved a strategy for expediting water projects and reducing undrawn federal grant funds. The strategy was developed as a cooperative effort among TWDB, the Texas Commission on Environmental Quality (TCEQ) and the US Environmental Protection Agency (EPA). It will be forwarded to EPA for approval.
TWDB administers the Drinking Water State Revolving Fund (DWSRF), which is funded by annual capitalization grants from Congress through EPA. DWSRF finances infrastructure improvements to drinking water systems with below-market loans and loan forgiveness.
Historically, TWDB set an annual capacity for the DWSRF program and committed funding up to that amount for projects. By the time the projects were planned, designed and constructed, it could take several years to draw down all of the federal funds. This long time frame primarily contributed to the creation of unliquidated obligations (ULOs).
Strategies to address the ULOs include transferring funds to the Clean Water State Revolving Fund to allow the grant funds to be immediately used by active clean water projects until they are needed for future drinking water projects; managing loan capacity of the program based on a cash draw model; incentivizing projects to complete construction quicker; and allotting more set-aside funds to TCEQ for capacity development of Texas public water systems.
"The innovative efforts of TWDB, TCEQ and EPA will be of great benefit to those across the state who use these funds," said TWDB Chairman Carlos Rubinstein. "Through the hard work of our agencies, we have arrived at a methodology for addressing pressing needs in clean water and drinking water."
"We're proud to have participated in this collaboration with the state of Texas to make sure these monies go to our communities for safe and clean water," stated EPA Region 6 Administrator Ron Curry.
TCEQ Chairman Bryan Shaw added, "By combining the regulatory and development aspects of this issue, these three agencies have truly worked together to provide for the basic necessities of Texans."
TWDB looks forward to working with EPA Region 6 and headquarters, TCEQ, the Office of the Governor, and the Office of the Attorney General to ensure success of this strategy, with a goal of addressing all ULOs by September 2016.