Maine Municipal Construction Grant Program and
Clean Water State Revolving Loan Fund

State Municipal Construction Grant Program

State law gives the DEP flexibility, through the Construction Grant Program, to use bond issue funds with other sources of funding to provide affordable financing of municipal and quasi-municipal wastewater facilities. In 1985 the Board of Environmental Protection adopted a policy to use 2% of the Median Household Income (MHI) as a not to exceed goal for a single family dwelling's annual sewer user charge. When possible, the DEP combines grant funds, CWSRF loan funds, and other sources of funds such as loans and grants from Rural Development loans and the Economic Development Administration, and Community Development Block Grants to keep user charges below this threshold.

State grant participation is limited to 80% of the project costs for wastewater treatment facilities, interceptor systems and outfalls. The word expense does not include costs relating to land acquisition or debt service, unless allowed under federal statutes and regulations. The commissioner is also authorized to grant an amount not to exceed 25% of the costs for preliminary planning or design of a pollution abatement program.

Clean Water State Revolving Loan Fund (CWSRF or SRF)

The CWSRF provides low interest loans to municipalities and quasi-municipal corporations, i.e. sanitary districts, for construction of wastewater facilities. The CWSRF is funded by a combination of federal capitalization grants, state matching funds equal to 20% of the federal grant, and loan repayment funds. The Maine Municipal Bond Bank (MMBB) is the financial manager of the CWSRF program. The MMBB combines federal, state, and repayment funds to create attractive interest rates, 2% below the market rate, for terms up to 20 years.

The DEP Division of Water Quality Management (DWQM) administers the technical aspects of the program and the projects funded by it. The primary purpose of the fund is to acquire, plan, design, construct, enlarge, repair and/or improve publicly-owned sewage collection systems, intercepting sewers, pumping stations, and wastewater treatment plants. The long term goal of the CWSRF is to establish a self-sufficient loan program that will maintain and improve Maine 's inventory of municipal sewage facilities in perpetuity. This will ensure preservation of the water quality gains that were realized by the initial construction of them. Where allowed by Federal law and State statues, the CWSRF also funds certain nonpoint source (NPS) controls.

Federal Fiscal Year (FFY) 2014 Clean Water State Revolving Fund

In March the Department notified municipal discharges, non-point source control entities, and consulting engineers of the FFY 2014 funding available for wastewater infrastructure and water pollution abatement projects and requested that they submit a listing of any projects to be considered for funding. The FFY 2014 federal appropriation requires States to use a portion of their capitalization grant as additional subsidy to borrowers. Based on the federal appropriation and Maine’s capitalization grant of $10,853,000, Maine’s CWSRF is required to provide a minimum of $590,595 and a maximum of $885,892 in additional subsidy. For the fifth year the Department will be offering this subsidy in the form of loan principal forgiveness to borrowers.

Congress and EPA encourage States to target this subsidy for public health and water quality protection projects to communities that could otherwise not afford an SRF loan. In addition, green infrastructure, water or energy efficiency improvements and sustainable infrastructure through implementation of asset management plans are also a priority to EPA. This necessitates the ranking of the projects to determine which projects will receive a portion of the limited principal forgiveness. An explanation of how principal forgiveness will be allocated in 2014 is included in the priority system section of the Draft Intended Use Plan (IUP) for FFY 2014.

Using the FFY 2014 ranking criteria, the Department reviewed information submitted by applicants for their proposed projects and developed a list of projects for funding through the CWSRF. Loan offers were made to fund the proposed projects on the draft list. Not all loan offers were accepted and any remaining principal forgiveness not accepted was redistributed to remaining applicants in accordance with the procedures outlined in the Final IUP. In partnership with the Maine Municipal Bond Bank, the Department is proposing to distribute this money to eligible projects in funding packages consisting of loan principal forgiveness and low interest loans.

In compliance with the requirement in the CWA sec. 606(c) to provide for public review and comment, the Department posted the Intended Use Plan in draft form for public comment. The Department also provided notice of the availability of this IUP to all organizations and individuals in its distribution list by email and/or letter on June 10, 2014. No comments were received.

FFY 2014 Documents

Contact

John True Engineering Services Manager (207) 287-7808
Division of Water Quality Management
17 State House Station
Augusta , ME 04333-0017

Prior Year Documents

Rules

Chapter 595, State Revolving Fund, Contains requirements pertaining to the SRF program.

Statutes

38 MRSA §411, State Contribution To Pollution Abatement (off-site)
38 MRSA §412, Grants By State For Planning (off-site)
30-A MRSA §5953-A
, Loans From Revolving Loan Fund (off-site)
30-A MRSA §6006-A, Revolving Loan Fund (off-site)

Supplemental Materials