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Drinking Water State Revolving Fund DWSRF

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Funding Drinking Water Infrastructure Projects

The 1996 amendments to the Safe Drinking Water Act (SDWA) established the Drinking Water State Revolving Fund (DWSRF). It is a financial assistance program with the intent of helping water systems and states achieve the objectives of the SDWA.

Congress appropriates funding for the DWSRF, then the U.S. Environmental Protection Agency (EPA) awards grants to each state (all 50 states plus Puerto Rico) based on the most recent Drinking Water Infrastructure Needs Survey and Assessment. Each state contributes an additional 20% match to the federal grants.​

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The 51 DWSRF programs provide low interest loans to eligible public water systems (PWS) for drinking water infrastructure projects. As money is paid back, the state makes new loans to other recipients. The fund "revolves" as repayments of loan principal and interest earnings are made.

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​In Kentucky, drinking water infrastructure project profiles are submitted by PWSs to their local Area Development District (ADD). From there, a prioritized list is submitted to the State during the annual Call for Projects (usually open between October and December). The Division of Water (DOW) and the Kentucky Infrastructure Authority (KIA) work together through an interagency agreement to review and provide DWSRF loans for eligible projects. Once DOW has ranked the projects into a Project Priority List based on the Priority System Guidance Document​, KIA will release the Intended Use Plan/Project Priority List around May of each year with the list of funded projects.

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  • Treatment
    • Projects to install or upgrade facilities to improve drinking water quality to comply with SDWA regulations
  • Transmission and distribution
    • Rehabilitation, replacement, or installation of pipes to improve water pressure to safe levels or to prevent contamination caused by leaky or broken pipes
  • Source
    • Rehabilitation of wells or development of eligible sources to replace contaminated sources
  • Storage
    • Installation or upgrade of finished water storage tanks to prevent microbiological contamination from entering the distribution system
  • Consolidation
    • Interconnecting two or more water systems
  • Creation of new systems
    • Construct a new system to serve homes with contaminated individual wells
    • Consolidate existing systems into a new regional water system
  • Planning and Design for eligible projects (which may be rolled into a subsequent construction loan)
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  • X Construction or rehabilitation of dams
  • X Purchase of water rights, unless the water rights are owned by a system to be purchased for consolidation as part of a capacity development strategy
  • X Construction or rehabilitation of reservoirs, except for finished water reservoirs and those reservoirs that are part of the treatment process and are on the property where the treatment facility is located
  • X Projects needed primarily for fire protection
  • X Projects needed primarily to serve future population growth
    • Congress specifically directed that DWSRF program will not be available to finance the expansion of any public water system in anticipation of future population growth.
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  • X Federally-owned public water systems
  • X For-profit non-community water systems
  • X Systems that lack the technical, managerial, or financial capacity needed to maintain compliance with the Safe Drinking Water Act (SDWA), unless the assistance will ensure compliance and the owner or operator of the system agrees to undertake feasible and appropriate changes in operation to ensure compliance over the long term (see Drinking Water Planning for more information on achieving technical, managerial, and financial capacity).
  • X Systems in enforcement, unless:
    • The funding assistance directly addresses the cause of the non-compliance issue, and the assistance will ensure that the system returns to compliance.
    • The funding assistance is unrelated to the cause of the non-compliance issue, but the system is under an Agreed Order (for maximum contaminant level and/or treatment technique violations) to return to compliance.
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​Once a project is listed on the Intended Use Plan/Priority Project List, the public water system (PWS) can either accept the loan or reject it. If the system chooses to accept DWSRF assistance, the next steps are:

  • If not already completed, the PWS begins the cross-cutter scoping process (including eClearinghouse, U.S. Fish and Wildlife Service, National Resources Conservation Service, U.S. Army Corps of Engineers, Kentucky Department of Fish & Wildlife Resources, and Kentucky Heritage Council reviews)
  • Once the cross-cutters have been submitted, DOW will conduct an Environmental Review of any potential impacts of the proposed project.
  • Upon completion of the Environmental Review by DOW, the system is notified of the determination. Depending on the findings of the Environmental Review, additional information may be required.
  • The PWS submits plans and specifications for the project to the DOW for review and approval. To streamline the process, the DOW recommends waiting to submit plans until all the requirements of the Environmental Review have been satisfied.
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During the construction process, DOW is also responsible for reviewing the engineering and construction procurement and payment requests, issuing construction permits, and monitoring the construction process.​

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The Green Project Reserve (GPR) is a provision of the State Revolving Fund (SRF) that designates funds for projects that are considered "green." This provision was included in the 2009 ARRA, 2010, and 2011 SRF Appropriation Bills but is not a requirement of the Capitalization grant.

However, sustainable and green projects remain important to Kentucky's SRF program and are eligible to receive incentive points under the current Priority System Ranking Criteria. Some examples of "green" projects include, but are not limited to:

  • Installation of variable frequency drives
  • Green roofs
  • Rainwater harvesting
  • Installing or retrofitting water efficient devices such as plumbing fixtures and appliances
  • Implementation of incentive programs to conserve water
  • Replacing existing broken or malfunctioning water meters
  • Retrofitting or adding Automatic meter reading (AMR) capabilities or leak equipment to existing meters
  • Conducting water utility audits
  • Projects that eliminate pumps or pump stations
  • Construction of US Building Council LEED certified buildings
  • Application of innovative treatment technologies
  • Renewable energy projects such as, wind, solar, geothermal, and micro-hydroelectric projects that provide power to a utility
  • Distribution pipe replacement or rehabilitation to reduce water loss
  • Storage tank replacement to reduce water loss
  • Recycling and water reuse projects

The Commonwealth of Massachusetts has been a leader in the nation at promoting and facilitating energy efficiency at water and wastewater utilities through "green" projects (Energy Case Study). The Massachusetts Energy Management Pilot Program for Drinking Water and Wastewater and Achieving Zero-Net Energy at Drinking Water (Zero-net Case Study) and Wastewater Facilities case studies provide examples of utilities that have implemented energy saving principles to realize both cost savings and increased energy efficiency.

Contact the Division of Water to find out if your project qualifies as a "green" project.

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