Connecticut's Clean Water Fund
The Connecticut Clean Water Fund (CWF) is the state's environmental infrastructure assistance program. The fund was established in 1986 to provide financial assistance to municipalities for planning, design and construction of wastewater collection and treatment projects. This program was developed to replace state and federal grant programs that had existed since the 1950s. The 1987 amendments to the Federal Clean Water Act required that states establish a revolving loan program by 1989. The fund was modified in 1996 to include the Drinking Water State Revolving Fund (DWSRF) to assist water companies in complying with the Safe Drinking Water Act by providing low cost financing.
Clean Water Fund: Financial Assistance for Municipal Projects including links to Connecticut Clean Water Fund Funding Application Forms
The fund consists of five accounts:
- the Water Pollution Control State account;
- the Federal Revolving Loan account;
- the Long Island Sound Clean-up account;
- the River Restoration account; and,
- the Drinking Water Revolving Fund account.
The federal account is designated as the qualifying State Revolving Fund (SRF) under Title VI of the federal Clean Water Act amendments of 1987 and is subject to EPA regulation. Federal assistance is deposited into the SRF. As of March 2001, the SRF has received $277.8 million of federal assistance and $717.8 million in state general obligation bonds. The DWSRF received federal drinking water capitalization grants totaling $43.8 milion for FY 97 - FY00. In addition, the federal drinking water capitalization grant in 2001 will be $7.8 million.
Benefit to Municipalities
When the CWF was created, it was designed to provide an equivalent level of financial aid as had been provided under the previous 55% Federal Construction Grants Program. The CWF provides a combination of grants and loans to municipalities which undertake water pollution control projects at the direction of the Department of Energy and Environmental Protection (DEEP). Municipalities receive a grant of 20% of the total project costs and a loan for the remainder of the project costs, excluding projects which correct combined sewer overflows (CSO). Combined sewers are old sewer systems that receive both sewage and stormwater runoff. These systems exist in Hartford, New Haven, Bridgeport, Waterbury and eight smaller cities. These projects receive grants of 50% and loans for the remainder of the cost. Because of the high cost of CSO projects, the cities involved, and their statewide significance, especially to Long Island Sound, these projects are given special consideration. The loans are repaid over 20 years, from scheduled completion of construction, at 2% interest. In 1999 the Legislature modified the CWF to provide a 30% grant for project costs associated with nitrogen removal.
Through its low interest rate and generous grant funding, the CWF provides Connecticut municipalities with one of the most favorable financing packages for wastewater projects in the United States.
Strength of The Clean Water Fund
The CWF is one of the most aggressive in the country. While many states have met only the minimum match to receive the federal funds, Connecticut has met the match 10 times over. With $995.6 million in state general obligation bonds and federal funds, this has become the third largest public works program in Connecticut. Revenue bonds are backed by the municipality's pledge of repayment, and, state and federal funds deposited in the debt service reserve accounts to leverage the state and federal funding. For the most part, only interest earned from these deposits will be used to support the bonds. This innovative financing mechanism allows more funds to be available earlier for municipal water pollution projects. The revenue bonds are rated AAA by two of the three rating services, documenting the strength of the financial program.
Throughout Connecticut, there are approximately 90 municipalities that operate publicly owned sewage systems. With an average life expectancy of 20 years, there is a need to rebuild treatment plants so they continue to meet the minimum national standard of secondary treatment. In addition, many municipalities must rebuild their plants to meet higher levels of treatment, called advanced treatment, in order to meet fishable-swimmable standards in the river receiving the discharge. Other needs include correction of combined sewer overflows; hydraulic expansion of the plants; sewer system expansion to meet growth needs; and, developing solutions to problem areas of septic system failures. The newest identified need is nutrient removal to protect Long Island Sound from low levels of dissolved oxygen which are threatening fish and other aquatic life.
In 1985, the State's estimated sewerage needs totaled $1.077 billion. Today, with inflation and a refined estimate for Long Island Sound project needs, total costs are estimated at $1.7 billion. Of this, $400 million is associated with combined sewer overflow projects and more than $700 million is associated with removing nitrogen to restore Long Island Sound.
The construction of the Waterbury treatment plant, the largest Clean Water Fund undertaken to date at $124 million will restore the Naugatuck River System to a condition not seen since the 1800's. Eventually, with planned dam removal the system may host an anadromous fish population.
Since the passage of Connecticut's Clean Water Act in 1967, all sewage treatment plants have been brought up to the level of secondary treatment. Secondary treatment removes approximately 85% of the organic matter in sewage and the treated waste is disinfected to protect public health. For some rivers, however, additional treatment, as much as 95-97% removal, is necessary to meet water quality standards. Currently (1997), 35 treatment plants have been identified as needing advanced treatment. Thirteen of those plants have been completed and are fully operational. The Quinnipiac, Pequabuck, Still, and upper Naugatuck Rivers are examples of rivers that were severely degraded by sewage in 1965. These Rivers now meet dissolved oxygen standards as a result of advanced treatment. In 1967, the discharge from Stafford Springs was untreated and the Willimantic River was severely polluted. With secondary treatment and industrial wastewater pretreatment, the Cole Wilde Trout Management Area on the Willimantic River below Stafford is one of the best fishing areas in Connecticut.
Throughout Connecticut water quality has improved markedly since 1967, largely as a result of improved wastewater treatment. Protection of public health and aquatic habitat as well as aesthetics are far better now than several decades ago. Finally, the CWF has created hundreds of jobs; DEP estimates it has the potential to create up to 1800 jobs per year.
Hypoxia, or low dissolved oxygen, problems in Long Island Sound remains as the most complex, difficult and costly problem to restore. Virtually all of Connecticut and even portions of Massachusetts, Vermont and New Hampshire drain to the Sound. With this runoff comes nutrients, heavy metals, organics and many other contaminants. The Long Island Sound Account of the CWF provides grants for special purposes including, in part: research toward protection of Long Island Sound; ambient monitoring of Long Island Sound; restoration and preservation of tidal coves and embayments; and, nonpoint source pollution control projects.
An additional use of the CWF was created in 1994 when the legislature passed "An Act Concerning Funding for River Restoration". The CWF can now provide funding to municipalities for projects which will improve aquatic habitat and the accessibility of rivers to the public. The multi-use CWF account provides the state the ability to address many diverse problems with the hope that water quality can be improved substantially over the next decade.
For additional information contact staff of the Bureau of Water Protection and Land Reuse, Clean Water Fund Management Office: (860) 424-3704.