IT’S A GREAT TIME TO SEEK CLEAN WATER FUNDING!


Before Authorities consider bidding out their projects, they should have funding secured to ensure completion.   In this edition of Procurement Corner, Robert Boos, Deputy Executive Director for Project Management at PENNVEST, gives insight to the current funding environment and how to leverage PENNVEST to help your capital projects’ funding needs.

The Pennsylvania Infrastructure Investment Authority (PENNVEST) has been providing low-interest loans and grants for clean water infrastructure projects since 1988. Initially created as a short-term program that would invest $2.5 billion, PENNVEST is now in its 31st year. To date, PENNVEST has offered more than $8.76 billion in financing, which has supported 3,918 water-quality projects, improving public health, safety, and the environment in communities throughout the commonwealth.
 

Project funding is derived from a combination of voter-approved state funds, Growing Greener, Marcellus Legacy funds, EPA grants, and recycled loan repayments from previous PENNVEST funding awards.
 

PENNVEST provides low-interest loans and grants for new construction or improvements to public and private drinking water, stormwater, and sewage treatment facilities. Funding is also available to implement best management practices that prevent nonpoint source pollution from MS4 systems and agricultural operations. Additionally, PENNVEST offers loans to remediate brownfields and works with the Pennsylvania Housing Finance Agency to provide financing to homeowners who need to repair or replace malfunctioning septic systems, connect to a public sewer system for the first time, or repair a lateral.

PENNVEST has funded projects in all 67 of Pennsylvania’s counties. Project costs have ranged from hundreds of thousands to 10s of millions of dollars.


PENNVEST is the only state revolving financing program in the country that receives and processes applications electronically. Our “cradle-to-grave” electronic portal manages all documents from disbursement to settlement. Recently, we updated and modernized the funds disbursement process to enhance efficiencies for borrowers, who have given us positive feedback on the improvements at 11 PENNVEST-hosted meetings across the commonwealth. To keep the momentum going, PENNVEST plans to modernize the application process to further improve access to funding for communities and the public.
 

For each project, PENNVEST does a financial analysis to determine the interest rates, the length of the repayment period on any loan, and to check for grant funding availability. Funding is based on the applicant’s capacity to handle the debt service and cover the operations of the system. The maximum interest rate on PENNVEST financing depends on the county where the project(s) is located and currently falls between 1.000% and 2.179% with a 20-year repayment term.
 

The difference in payments between the subsidized interest rate from PENNVEST and the market rate is like getting a grant every year for 20 years. On a $2 million project, the savings amounts to more than $41,000 a year and a “grant equivalent” of more than $825,000. This savings, combined with the project’s construction costs, provides the added benefit to offset inflationary issues with the waiting period that often occurs for needed improvements.
 

It’s a great time to seek funding for needed water quality improvements. PENNVEST has a projected funding budget of more than $550 million per year for loans, grants, and guarantees, and can support similar levels of funding for the foreseeable future. PENNVEST funding is competitive, which means there is no guarantee on the number of projects and allocations the board will approve during quarterly meetings. However, since PENNVEST has recently been able to assist all “shovel-ready” projects, communities and individuals should consider submitting applications.
 

Currently, the EPA is administering the Water Infrastructure Financing and Innovation Act of 2014 (WIFIA), which established a federal credit program for eligible water and wastewater infrastructure projects. The program provides long-term, low-cost supplemental loans for 49% of eligible project costs at U.S. Treasury rates. There is no maximum borrowing amount; however, the program is limited by appropriated controls. Therefore, it is unlikely that a single request for credit assistance will exceed the appropriated controls on EPA’s lending. PENNVEST is positioned to help communities leverage the WIFIA program and provide funding matches so they can move forward with larger water and wastewater projects.
 

With emerging issues like PFAS, MS4 regulations, aging water and wastewater infrastructure, and nonpoint source pollution, PENNVEST is positioned to support the financing of your next clean water project. The single most important thing a potential applicant can do is contact a regional PENNVEST project specialist to discuss their project and available financing.
 

For more information about PENNVEST funding programs, application deadlines, board meeting dates, and regional contacts, go to www.pennvest.pa.gov or contact Robert Boos, Deputy Executive Director for Project Management, at rboos@pa.gov or (717) 783-4493.
 

About PennBid: A PMAA-endorsed program, The PennBid Program is the leader in e-procurement and electronic bid management in Pennsylvania. Provided at no cost to public agencies or design/consulting firms, PennBid has opened doors for many to take advantage of electronic procurement tools generally not available due to high cost and system complexity. For more information about PennBid or to arrange a demo of the program, please call (610) 693-4769 or visit our website at www.pennbid.net.