ALBANY—The New York State Water Infrastructure Improvement Act of 2015 included in the recently enacted 2015-2016 New York State budget will provide $200 million in much-needed grant funding over the next three state fiscal years to fund municipal wastewater and drinking water projects.
State officials are hopeful that the grants will leverage significantly more investment in municipal wastewater and infrastructure projects to improve water quality and protect public health.
The New York State Environmental Facilities Corporation and the New York State Department of Health announced on July 1 that $50 million in water infrastructure grants are now available for local governments for critical water and wastewater upgrades.
Officials estimate the $50 million in grants awarded this fiscal year will likely leverage another $150 million to $184 million in wastewater and drinking-water capital investments.
A total of $75 million in water infrastructure grants will be available each year for the last two years of the program. This year, $30 million will be available for wastewater infrastructure projects and $20 million will be available for drinking water projects, which will be administered by the state Environmental Facilities Corporation, the state Department of Environmental Conservation and the state Department of Health.
The New York State Water Infrastructure Improvement Act was championed by New York State Assemblymen Steve Otis (D-Rye) and John McDonald III of (D-Cohoes), both former mayors, and advocates for addressing municipal infrastructure costs.
“Gov. Cuomo and Speaker Heastie have shown tremendous leadership in helping to meet the water infrastructure needs of local governments throughout the state,” said Reps. Otis and McDonald in a joint statement after the program was included in the state budget on April 1. “This new grant program will make water quality projects more affordable to municipalities and shift some of the costs away from the already overburdened local property taxpayers.”
Assemblyman Otis told CONSTRUCTION NEWS this month that many municipal wastewater and drinking water initiatives have been shelved or delayed because localities are forced to fully finance the projects. “A lot of these projects really have stalled and have not moved ahead because municipalities are having trouble finding places in their budgets…” for projects that are to be financed with all municipal debt, he explained. “If they can get a percentage of the project as a grant it would take some of these projects off the shelf and stimulate more construction activity to do these repairs.”
Under the newly-enacted grant program, drinking water projects that provide the greatest reduction in risk to public health will be eligible for grants. Preference will be given to hardship communities with 75 percent of the drinking water funds being reserved for them. Each project or community may receive grants of up to 60 percent of a project’s eligible costs, with a $2-million limit.
Applications for both wastewater and drinking water projects are now available and due by Sept. 4, 2015.
“Strengthening the infrastructure of our water systems is vital for protecting the long-term health and sustainability of communities across the state,” said Sabrina M. Ty, Environmental Facilities Corp. President and CEO. “With these grants, we are adding to the billions of dollars in interest-free loans New York State has provided to help localities move forward with these projects, create jobs, and protect the environment.”
“Ensuring the delivery of safe drinking water is an essential step in building healthier communities,” said New York State Health Commissioner Dr. Howard Zucker. “The overwhelming majority of people in New York State receive their drinking water through a public water supply system. These grants will enable localities to make necessary upgrades to their water infrastructure to guarantee that future generations have the same clean drinking water we have today.”
Wastewater Infrastructure Projects
As required by the statute, the Environmental Facilities Corporation will give priority to projects that meet economic hardship and environmental health criteria. Priority will also be given to wastewater projects that mitigate combined sewer and storm sewer overflows, as well as for projects that increase system resiliency to protect wastewater collection and treatment systems from sea level rise and damage from extreme weather.
Applicants seeking grant funding for wastewater projects are eligible to receive grants of either 25 percent of eligible project costs or $5 million, whichever is less.
Drinking Water Infrastructure Projects
Drinking water projects that provide the greatest reduction in risk to public health will be eligible for grants. Preference will be given to hardship communities with 75 percent of the drinking water funds being reserved for them. Each project or community may receive grants of up to 60 percent of a project’s eligible costs, with a $2-million limit.
Applications for both wastewater and drinking water projects are now available and due by Sept. 4, 2015. More information on the grant program and applications is available at www.efc.ny.gov/NYSwatergrants.
In addition to the grants, the EFC and DOH offer zero-percent and low-interest financing to communities to further reduce the cost of infrastructure projects.
Since 2011, New York State has financed more than $6.7 billion in critical water and wastewater infrastructure investments—the largest four-year investment since the inception of the revolving loan funds in 1987. The state revolving loan funds are administered by the New York State Environmental Facilities Corporation, on behalf of the Department of Environmental Conservation, jointly with the New York State Department of Health.
Despite the access to low-interest state money, Rep. Otis speculated that some municipalities are reluctant to commit to borrowing for qualifying project work because these municipality will still be obligated to repay the monies borrowed over time. He noted that the state Environmental Facilities Corp. makes available approximately $1.5 billion in loan financing on average each year, but only receives about $500 million in loan applications.
“You have basically unused lending capacity for these projects that are not being put to use,” Rep. Otis said. “The purpose of the grant program is to stimulate more projects and more use of that (revolving loan) fund.” He also noted municipalities that qualify for the grant funding can either tap into the state’s revolving loan fund or other sources that might offer more attractive financing terms.
Rep. Otis is confident the grant program will leverage a significant increase in municipal infrastructure investment in New York State. “I think we are going to see projects that were in the design stages—those projects that municipalities couldn’t afford—move forward. This is going to stimulate more projects going to construction,” he said.