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. Whenever possible, the DEP works with local officials to combine grant funds, Clean Water State Revolving Fund loan funds (CWSRF), and other sources of funds such as loans and grants from Rural Development loans and the Economic Development Administration, and Community Development Block Grants in an effort to keep user charges below this threshold.

Under this program, and within the availability of funding, the Commissioner is authorized to grant an amount not to exceed 25% of the costs for preliminary planning of a pollution abatement program and design of a wastewater infrastructure project; and an amount not to exceed 80% of the construction and construction engineering costs for wastewater treatment facilities, interceptor sewer systems and effluent outfalls.

Clean Water State Revolving Loan Fund (CWSRF)

Through a partnership between the Maine Municipal Bond Bank (MMBB) and the DEP, the CWSRF program provides low interest loans to municipalities and quasi-municipal corporations (i.e. village corporations, sanitary, sewer & utility districts, etc.) for the construction of wastewater infrastructure projects. The DEP Division of Water Quality Management (DWQM) administers the technical aspects of the CWSRF program and the projects funded by it. The long term goal of the CWSRF is to establish a self-sustaining 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.

Projects

The primary purpose of the fund is to acquire, plan, design, construct, enlarge, repair and/or improve publicly-owned sewage collection systems, interceptor sewers, pumping stations, and wastewater treatment plants.  In addition, the program also funds public and private non-point source water quality protection and improvement projects; such as landfill closures, sand/salt storage facilities, septic system repair and replacement, storm water projects, agricultural best management practices, and specific silviculture equipment purchases.

Funding

The CWSRF program is funded by federal and state contributions which are loaned out and repaid with interest.  The repayment and interest money are recycled back into the program to fund additional water quality protection or improvement projects.  The revolving nature of the program is designed to provide ongoing funding for water quality projects.  The MMBB combines federal, state, and repayment monies to create attractive interest rates, 2% below the market rate, for terms up to 30 years or the useful life of the project, whichever is less.

How to apply

Maine’s CWSRF program is an open enrollment program with no application deadline unless the loan applicant is interested in qualifying for a loan with additional subsidy.  To apply for a loan without additional subsidy, simply complete the CWSRF Notification of Intent to Borrow form and submit it to the Department as instructed and complete the SRF financial Application located on the MMBB website and submit to the MMBB.  Loan applicants interested in qualifying for a loan with additional subsidy are required to submit a different application to the Department by a specific deadline.  When available, those details are provided in the following section.

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