The Federal Safe Drinking Water Act (SDWA) Amendments of 1996 authorized a Drinking Water State Revolving Fund (DWSRF), a low-cost loan fund for community or non-profit non-community public water systems (PWSs) to finance the cost of repair and replacement of drinking water infrastructure, maintain or achieve compliance with SDWA requirements, and protect drinking water quality and public health. Pursuant to the 1996 SDWA Amendments, the State established the DWSRLF in 1997 with the passage of the Drinking Water State Revolving Loan Fund (DWSRLF) Act.
There are three priorities of the program:
- protection of public health;
- compliance with drinking water standards; and
- affordable access to drinking water.
To ensure the success of the program, NMFA and DWB partner to provide technical, managerial and financial assistance to water systems as well as low-cost loans.
The DWSRLF provides long term loans at below market interest rates.
- Publicly-Owned Water System—Disadvantaged 0%*
- Publicly-Owned Water System—Non-disadvantaged 2%
- Privately-Owned Water System—Non-profit 3%
- Privately-Owned Water System—For-profit 4%
* Disadvantaged funding is limited to the first $600,000 of total project financing. Disadvantaged is defined as:
- Disadvantaged - Community has (1) a Median Houshold Income (MHI) less than 90% of the State’s MHI and (2) an Affordability Ratio between 0.010 and 0.015.
- Severely Disadvantaged – Community has (1) an MHI less than 90% of the State’s MHI and (2) an Affordability Ratio greater than 0.015.
Median Household Income date can be found at: MHI Information
Community water systems and non-profit non-community water systems are eligible to apply for DWSRLF funding. Projects that protect drinking water quality and public health are eligible for the DWSRLF, including:
- New and replacement water sources
- Transmission and distribution lines
- Supervisory Control and Data Acquisition (SCADA) systems
- Infrastructure to interconnect or regionalize water systems
- Energy efficiency and water conservation projects
- Planning and design documents relevant to the specified project
In addition to funding costs needed for project construction, the DWSRLF can also finance planning, design and associated pre-project costs, and land acquisition needed for locating project components.
Current Comprehensive and Fundable Priority List
DWSRLF Comprehensive and Fundable Priority Lists identify projects that are expected to receive DWSRLF funding in the future. They are prepared quarterly.
Water systems on the Fundable Priority List have met three criterias:
- capacity to maintain compliance with federal and state drinking water regulations;
- readiness to proceed with the project in a reasonable timeframe;
- financial ability to take on debt and repay the loan, and are eligible to submit a DWSRLF application.
EPA Grant and Intended Use Plan
The NMFA is the state’s recipient of federal Environmental Protection Agency (EPA) Capitalization Grants awarded under the Safe Drinking Water Act (SDWA). The SDWA partners with the NMFA and the New Mexico Environment Department (NMED) to carry out the provisions of the program.
Through the Capitalization Grants, approximately $104.8 million is dedicated solely to the low-cost loan fund with $27 million dedicated primarily to the NMED for its use in delivering technical assistance. The technical assistance provides help in bringing water systems to compliance with the federal SDWA.
The Intended Use Plan is required by the SDWA in order to receive each Capitalization Grant, pursuant to 40 CFR 35.3555. The amount of the Capitalization Grant allotted to the State is determined by Congress and administered by the EPA. The Intended Use Plan contains information about the short and long-term goals, subsidy and green project reserves, principal forgiveness, and other programmatic topics funded by the Capitalization Grant.
New Mexico State Environmental Review Process (SERP)
The applicant’s preparation of the environmental information required as part of the State Environmental Review Process (SERP) and the Chief Executive Officer of the NMFA review and issuance of a determination forms an integral part of the planning process required of any potential applicant to the DWSRLF. (In 1997, the New Mexico Legislature enacted the Drinking Water Revolving Loan Fund Act – 1997 N.M. Laws, ch. 144, paragraph 1 to 9 (the Act)). The Act establishes a DWSRLF that is funded through the Safe Drinking Water Act (SDWA) and Amendments – United States Environmental Protection Agency (EPA) and administered by the NMFA.
SERP Tier I (PDF)
The NMFA applies the Alternative State Environmental Review Process (Alt-SERP) to all projects and activities, except for source water protection and technical assistance activities, funded with monies known as Tier II. These Tier II funds are those funds that are returned to NMFA from loan repayments and that are greater than the amount of capitalization grant deposited into the DWSRLF. This money is known as Tier II money and is used for non-equivalency projects. Non-equivalency projects include projects and activities for which NMFA provides assistance in amounts that are greater than the amount of the capitalization grant deposited into the Fund or set-aside accounts and are not subject to the requirements of the crosscutters.
SERP Tier II (PDF)
If you have any questions regarding the DWSRLF application process, please contact:
Sr. Program Administrator, (505) 992-9615 – firstname.lastname@example.org
Sr. Program Administrator, (505) 992-9654 – email@example.com
Sr Administrative Assistant, (505) 992-9632 – firstname.lastname@example.org
Director, Water Resources, (505) 992-9662 – email@example.com