03.25.15

SCHUMER LAUNCHES NEW EFFORT TO PROVIDE ADDITIONAL GRANTS INSTEAD OF JUST LOANS FOR NYS SEWER REPAIR PROJECTS – FED SEWER FUNDS, CURRENTLY AVAILABLE AS LOANS, CAN MAKE UPGRADES DIFFICULT FOR COMMUNITIES TO AFFORD

Schumer Provision Will Make Major Fed Funds Available as Grants for First Time in Years & Help Kickstart Projects Around the State – Large Number of Water & Sewer Main Breaks This Winter Highlight Importance of Getting Projects Moving Forward 

With A Backlog of 279 Sewer Projects Awaiting Funding Throughout Upstate NY & Hudson Valley, Schumer Pushes NYS EFC To Use Maximum Amount of Fed Funds Recently Made Available as Grants; Would Free Up an Estimated $46M in Fed Funds this Year That Could Help Move Projects Fast; For Some Communities, Grants Are A Necessity 

Schumer: Providing More Sewer Grants Would Help Turbocharge Projects Around The State

Today, on a conference call with reporters, U.S. Senator Charles E. Schumer launched a push to help communities around New York State better afford much-needed sewer repair projects. Currently, sewer projects can be very hard for municipalities to afford because in recent years federal sewer funding that helps pay for many of them is available almost exclusively as loans. Recently-passed federal legislation, that Schumer supported, enables a significant portion of the federal funding for sewer projects to be awarded as grants – instead of just as loans – for the first time in years, which will help make repair projects more affordable for municipalities. For some communities, having grant funding available is a necessity in order to get long-stalled sewer repairs moving forward. Schumer noted that the New York State Environmental Facilities Corporation (EFC) receives over $150 million in federal funds for sewer repair projects each year, and he will urge EFC to make over $46 million of that funding – the maximum allowed under the new federal law – available to communities around the state in the form of grants. Schumer said that the large number of water and sewer main breaks this winter highlights the importance of investing in our sewer systems, and this effort will help get more projects moving forward quickly.

“New York has some of the oldest sewer systems in the country, and we should be doing everything in our power to provide the funding needed to repair and upgrade them to ensure the price tag doesn’t rise higher or put public health and the environment at risk. But currently, cash-strapped and smaller communities have difficulty taking on debt and affording major wastewater infrastructure projects. That is why I fought to include a provision in the 2014 Water Resources bill that allows states to give up to 30 percent of their federal funding out as grants, instead of just loans. It will help communities across New York State take better advantage of federal sewer funding and get more projects moving forward, and I am urging the Environmental Facilities Corporation to take full advantage of this opportunity and provide the maximum possible amount of funding as grants,” said Schumer. “We need to invest in our sewer and wastewater infrastructure, which not only have a large impact on health and municipal budgets, but also create jobs and stimulate our economy in the process. We need to start that investment today, and I will be on the front lines to make sure this federal investment in sewer projects continues to grow in the future.”

For years, Upstate New York communities have been grappling with aging sewer infrastructure that threatens the environment and public health. In 2013 the American Society of Civil Engineers’ Infrastructure Report Card gave the United States wastewater system a “D-“ in terms of its overall condition. As sewer systems age, contaminants are more likely to leak into soil and waterways; and pathogens are more likely to be released, which can affect local wildlife and fisheries and threaten drinking water. However, in order to make needed upgrades to guard against future environmental and health risks, villages, towns, and cities across the state often must take on millions of dollars’ worth of debt, something that is extremely difficult for many municipalities to afford. Schumer said that when these cash-strapped local governments have difficulty affording significant wastewater infrastructure projects, they are typically forced to put them off as a result, potentially increasing the risk to the environment and residents.

One of the federal programs available to local governments throughout New York is the Clean Water State Revolving Fund (CWSRF) program. In recent years, the CWSRF program has operated primarily as a loan program. Schumer explained that the federal government distributes CWSRF funds through its appropriations process to New York State’s Environmental Facilities Corp (EFC); these federal funds are then distributed through low-interest loans to municipalities for sewer and water projects. Over the past few years New York was only able to give out less than 10 percent of its federal allotment as grants; the rest of the funding was provided through loans. For this reason, Schumer pushed to include a new provision in the Water Resources Reform and Development Act (WRRDA), which passed in 2014, that would allow states to give out more of federal funding they receive through the CWSRF program as grants. Under this legislation, for the first time in years, up to 30% of the federal funding allocated toward sewer projects can be awarded as grants, instead of just as loans, as long as EFC agrees to do so

Last week, EFC received its federal CWSRF allocation for sewer repair projects this year, totaling $154,982,000. Schumer noted that, the federal legislation gives states the opportunity to award up to 30% of their CWSRF allocation as grants, which means that EFC would be able to make over $46 million available to communities around the state in the form of grants. Therefore, Schumer is urging the NYS EFC to allocate the maximum amount possible as grant funding, as it could help get more major wastewater infrastructure projects off the ground and moving forward quickly.

Grants can be more valuable than loans for two reasons. First, a relatively small grant from the federal government can give municipalities the support they need to begin construction right away, with the knowledge that they have the project funds in the bank. Second, for towns that secure a long-term, low-interest loan (either public or private), a grant from the CWSRF program can help them pay down the expected interest, or that municipality can use it to subsidize a project and make it more affordable for a town and its taxpayers to complete. Schumer said this will help get many more backlogged New York State sewer projects off the backburner. Ultimately the increased grant authority gives EFC the added flexibility to put together more attractive funding options for communities to take advantage of in the form of grants or a combination of grants and loans.

During the call, Schumer revealed the number of sewer projects awaiting federal funding in each region of New York State. Currently, there are a total of 279 projects in Upstate New York and the Hudson Valley awaiting funding. Between Upstate New York, the Hudson Valley, and Long Island, there are a total of 321 projects:

- In the Capital Region, there are a total of 37 sewer projects awaiting federal funding this year alone.

- In Central New York, there are a total of 56 sewer projects awaiting federal funding this year alone.

- In Western New York, there are a total of 18 sewer projects awaiting federal funding this year alone.

- In the Rochester-Finger Lakes, there are a total of 21 sewer projects awaiting federal funding this year alone.

- In the Southern Tier, there are a total of 26 sewer projects awaiting federal funding this year alone.

- In the Hudson Valley, there are a total of 65 sewer projects awaiting federal funding this year alone.

- In the North Country, there are a total of 56 sewer projects awaiting federal funding this year alone.

- On Long Island, there are a total of 42 sewer projects awaiting federal funding this year alone.

Schumer has long been a proponent of increasing federal aid to repair New York’s aging sewer systems, which are among the oldest in the country, because each dollar invested helps to create jobs, repair crumbling water and wastewater infrastructure, and protect public health and environmental quality. The federal Department of Commerce estimates that each job created in a local water and wastewater industry creates over 3.5 jobs in the national economy and each public dollar spent yields over $2.50 dollars in economic output in other industries. In addition, not only do local governments need to repair and upgrade their sewer infrastructure due to these environmental and health concerns, but often they are mandated to do so in order to comply with the federal Clean Water Act. The Clean Water Act requires communities to improve water quality, achieve and maintain compliance with environmental laws, protect aquatic wildlife, protect and restore drinking water sources, and preserve our nation's waters for recreational use. In order to comply with the Clean Water Act, local governments must invest significant funds into sewer repair and upgrade projects.

CWSRF is particularly important to New York because the state gets approximately 11% of the program’s funding level every year. New York’s funding level is so high due to a combination of population, age of infrastructure and cost to undertake major infrastructure projects.  In the 25 years CWSRF has been in existence, the program has financed nearly 1,650 projects and New York has benefitted from close to $13.6 billion in leveraged financing from just $1.95 billion in federal investment.

A copy of Senator Schumer’s letter to the New York State Environmental Facilities Corporation (EFC) appears below:

Dear President Matthew J. Driscoll,

Last week the U.S. Environmental Protection Agency allotted New York State $154,982,0000 in funding from the Clean Water State Revolving Fund (CWSRF) program. As you are aware, this program is critical to helping local communities fund wastewater projects throughout the State. Local governments throughout New York rely on funds from this program to help advance projects and repairs that would otherwise be cost prohibitive for local rate payers. Over the past several years only limited funding from this Federal Program was authorized to be used as grants instead of as loans. However, as part of the Water Resources Reform and Development Act (WRRDA) of 2014 the Environmental Facilities Corporation (EFC) now has the authority to spend as much as 30% of the federal funding it receives on grants instead of loans. I urge you to make full use of this new authority which I fought to include in WRRDA, and to make over $46 million of your federal funds in the CWSRF available to local communities as grants.

Over the past several years my office has heard from a number of communities throughout the State who have raised the lack of available grant dollars for sewer systems as one of the biggest challenges they are facing. It is in response to their calls and the need to advance more sewer system projects throughout New York to the construction phase, that I pushed to include this additional subsidization authority for the CWSRF in WRRDA. Historically, when EFC has made large amounts of grant dollars available for use by local communities or has blended grant funding with low-interest loan authority it has been able to advance a greater number of projects. My hope is that you will make full use of this new authority and that New York State will once again see an uptick in sewer system upgrades and repairs.

In addition to making full use of this authority this year, I would ask that you utilize this new authority for each of the five years covered under WRRDA 2014. I will continue to fight, as I have in previous years, for the highest level of funding for the CWSRF. As long as the federal appropriation to the overall program remains above $1.3 billion, EFC will continue to be able to utilize 30% of its share as grants. Doing so could provide well over $200 million in grant funding for local communities over the next five years. These grant dollars, when combined with EFC’s existing loan authority under the program and with communities independent ability to borrow could be leveraged into massive investments in our State’s sewer system.

I appreciate your consideration of this request and look forward to continuing to work with you to advance sewer infrastructure projects in New York State. By working together to ensure that local communities are provided the greatest possible access to federal funds we can help spur investment into our critical wastewater infrastructure. Should you need more information or have further questions please do not hesitate to contact my office.

Sincerely,

Charles E. Schumer

United States Senator

###



Previous Article Next Article