Management • Alaska Department of Water 

Recognizing


Performance,


Demonstrating


Infrastructure Finance Authority •

 • Arkansas Soil and Water Conservation

Resources Control Board • Colorado 

ado Department of Public Health and 

ces and Power Development Authority • 

l Protection • Connecticut Office of the 

ral Resources and Environmental Control 

otection • Georgia Environmental Facilities

daho Department of Environmental Quality 

es • Wyoming Department of Environmental 

tal Facilities Corporation • North Carolina

Resources • North Dakota Department of 

nk • Ohio Environmental Protection Agency 

lahoma Water Resources Board • Oregon Infrastructure Investment 

Environmental Protection • Puerto Rico 

Rico Infrastructure Financing Authority • 

gency • Rhode Island Department of 

lina Budget and Control Board • South 

Environmental Control • South Dakota 

Resources • Tennessee Comptroller of the 

ronment and Conservation • Texas Water 

t of Environmental Quality • Vermont 

n • Vermont Municipal Bond Bank • Virginia 

irginia Resources Authority • Washington 

artment of Environmental Protection • West 

Wisconsin Department of Administration • 

Department of 

servation and Natural Resources • New 

 Services • New Jersey Department 

Environmental Infrastructure Trust • New 

 Massachusetts Water Pollution Abatement 

mental Quality • Michigan Municipal Bond 

riculture • Minnesota Pollution Control

Authority • Mississippi Department of Natural Resources • Missouri 

sources Authority • Montana Department of 

nt of Natural Resources and Conservation 

l Quality • Nebraska Investment Finance 

cy • Indiana Department of Environmental 

y • Iowa Department of Natural Resources 

ent of Administration • Kansas Department 

evelopment Finance Authority • Kentucky 

ture Authority • Louisiana Department of 

nt of Environmental Protection • Maine 

ment of the Environment • Massachusetts Clean Water State Revolving Fund Programs / 2005 Annual Report


Results


tment of 

of 

w York Environmental 

 Pennsylvania 

nd Investments 
Dear Colleagues, 

The Clean Water State Revolving Fund (CWSRF) was created in 1987 by Congress with the intent of providing 

states with a continuous source of funding to address water quality projects. Since its inception, this unique collaboration between EPA and the states has grown to become the largest federal funding program for water infrastructure projects across the country. This 2005 Annual Report on the Clean Water State Revolving Fund provides 

an overview of the activities, accomplishments, and future plans for this highly successful program. 

Over the past 18 years, state CWSRF programs have loaned $52.7 billion for projects to maintain and improve 

publicly owned treatment works, mitigate non-point source pollution, and promote estuary management. The 

CWSRF continues to serve as a cost-effective water infrastructure financing mechanism. The low interest rates 

offered by state CWSRF programs make more projects possible, and the revolving nature of the fund provides 

high return on federal investment. These attributes ensure that the CWSRF will remain a key source of financing 

water infrastructure into the future. 

I am particularly pleased that the 2005 Report brings to light progress made in linking CWSRF financing to environmental benefits. In 2005, all 51 CWSRF programs agreed to use a suite of environmental indicators to show 

how their CWSRF projects impact water quality and public health. States and EPA can now link assistance to 

Clean Water Act goals: swimming areas protected and fisheries restored. 

Much of the success of the CWSRF program can be attributed to the high level of professionalism among program managers. Recognizing that innovations lead to greater performance, EPA created the PISCES Awards 

(Performance and Innovation in the SRF Creating Environmental Success) in 2005. The PISCES Awards allow 

EPA to acknowledge and promote program innovations that advance EPA goals of performance and water quality 

protection. 

I am pleased to share with you the 2005 activities and successes of the Clean Water State Revolving Fund. 

Sincerely, 

Benjamin H. Grumbles 

Assistant Administrator 

Office of Water 
CWSRF Programs: Recognizing Performance and Demonstrating Results ........2


Funding for Water Quality: Reporting Environmental Results ........................4


Highlights from EPA’s CWSRF Business Plan ..................................................8


CWSRF PISCES Awards: Performance and Innovation in the SRF ..............11


CWSRF 2005 Performance Highlights..............................................................14


2005 Financial Performance Overview ............................................................18


Table of Contents

Recognizing Performance, Demonstrating Results 

1 
2 Clean Water State Revolving Fund Programs / 2005 Annual Report

CWSRF Programs : Recognizing


Performance and Demonstrating Results


Over the past 18 years, the Clean Water State Revolving Fund 

(CWSRF) has proven to be an efficient and innovative federal-state 

program for funding projects that 

protect the nation’s waters. Since 

last year’s first edition of the Clean Water State Revolving Fund Annual 

Report, the CWSRF program has realized many goals and continues to 

build upon an already strong foundation set down in 1987. This 2005 

Annual Report details the program’s 

accomplishments and highlights 

new developments from 2005, 

including the progress made on reporting environmental benefits 

and the distribution of awards to 

state CWSRF programs exemplifying 

superior performance. 

The CWSRF has made nearly 16,800 

loans for projects, amounting to over 

$55 billion in funds available for 

an online database that tracks envi­

ronmental benefits derived from 

projects. This reporting provides an 

accounting of the environmental 

achievements of the CWSRF nationally and for each state. 

2005 also marked the first presentation of the CWSRF PISCES Awards, 

which recognize outstanding performance and innovative strategies 

within state CWSRFs. The awards 

highlight individual achievements 

and offer a model for others to follow. 

Looking to the future, recent natural 

disasters underscore the importance 

and vulnerability of our nation’s water resources and infrastructure. 

The CWSRF program is prepared to 

play an important role in meeting 

our continuing need for investment 

in sustainable infrastructure. The 

program is also ready to address wet 

assistance since the first loans were 

made in 1988. The CWSRF has aver­

aged nearly $4.5 billion in annual 

assistance since 2000. The program 

has accomplished this feat without 

experiencing any loan losses. Given 

these strong financial conditions, 

state CWSRF programs have 

achieved high regard in the banking 

industry. The next page summarizes 

the CWSRF’s funding levels for 

investment in water quality. To demonstrate the environmental 

benefits of projects being funded by 

the CWSRF, states and EPA have 

advanced the process for benefits reporting rapidly over the past year. 

States have begun entering data in 

weather runoff, failing decentralized wastewater systems, and nonpoint 

sources of pollution, all of which 

pose significant threats to water 

quality nationwide. The CWSRF can 

provide key funding resources to 

respond to these problems as it continues to foster innovation in 

finance and management to adapt 

to changing demands. 
Clean Water State Revolving Fund National Performance Summary Statement 

Fund Activity - Estimated ($ Millions) 

2005 2004 

Annual Fund Activity 

Federal Capitalization Grants 1,355.6 1,092.8


State Matching Funds 203.9 255.3


New Funds Available for Assistance 3,807.5 5,317.6


Project Commitments (Executed Loan Agreements) 4,856.5 4,602.2


Project Disbursements 4,165.7 4,297.5


Cash Draws from Federal Capitalization Grants 1,310.2 1,415.3


Cumulative Fund Activity 

Federal Capitalization Grants 23,251.5 21,895.9 

State Matching Funds 4,806.0 4,602.1 

Funds Available for Assistance 55,266.2 51,458.7


Project Commitments (Executed Loan Agreements) 52,703.7 47,847.2


Project Disbursements 44,864.6 40,698.9


Cash Draws from Federal Capitalization Grants 21,135.7 19,825.5


Source: EPA's CWSRF National Information Management System. 

Recognizing Performance, Demonstr

ating Results 

3 
4 

In 2005, all 51 CWSRF programs 

agreed to use a suite of environmental indicators to show how their 

CWSRF projects impact water quality and public health. Reporting is 

underway in over 40 states. States 

and EPA can now link assistance to 

Clean Water Act goals such as 

swimming areas protected and fisheries restored. Such outcomes show 

the environmental value of the 

CWSRF’s excellent financial record. Results for 

States and EPA 

Recognizing that key program 

stakeholders value results-oriented 

information, states and EPA jointly 

developed the environmental reporting system. A 2001 taskforce report, performance measurement 

efforts in Georgia, Washington, and 

Oklahoma, and a working session 

with California, Nevada, and Hawaii 

and user feedback led to the release 

of a web-based reporting form in 

August 2005. 

The CWSRF benefits reporting website facilitates use of project water 

quality information at the state and 

federal levels. New fields allow 

users to enter nonpoint source projects and to pinpoint affected waterbodies. Customized state listings of 

designated surface waterbody uses 

make the information more rele

vant 

to state-level stakeholders. For immediate use of this valuable 

information, state managers can 

now automatically generate reports 

detailing how their CWSRF programs fund projects that address water quality problems and that 

affect public uses of their states’ waterbodies. Access to reports 

opens the door for EPA Regions to 

Clean Water State Revolving Fund Programs / 2005 Annual Report

Funding for Water Quality:


Reporting Environmental Results


CWSRF managers helped identify 

opportunities for documenting envi­ ronmental gains. 

A workgroup of state representatives and EPA met in the fall of 2004 

and designed a set of core measures 

that gather benefits data while minimizing the burden on CWSRF programs. Key indicators fall into four 

areas: savings to borrowers, utility 

improvements, addressing water 

quality problems, and protection 

and restoration of public health and 

biological communities. 

Following 

an initial comment period, 

over 20 

states piloted these measures, recording benefits derived from over 

$3 billion of assistance. Data review 

help states demonstrate perform­

ance and outcomes. 

States and EPA will continue to work together to improve the data 

entry and reporting portions of the 

environmental benefits system. As 

program managers download and work with their states’ data, EPA will 

incorporate their ideas for new reports. A state-led steering committee has begun discussions on 

data quality issues and new opportunities for reporting. 
CWSRF Assistance Supports Surface Waterbody Designated Uses 

500

1000

1500

2000

2500

3000

3500

4000

5000

Assistance

All

Fisheries

All

Recreation

Drinking

Water

Supply

Agriculture Other

Primary & Secondary uses supported by CWSRF projects

Drinking

Water

Supply

All

Fisheries

All

Recreation

Agriculture Other

# of Projects

50

100

150

200

250

300

350

400

450

uses--$3 billion for freshwater fisheries, $2.5 billion for recreational 

uses, and $0.4 billion for drinking 

water sources--mirrors the distribution of these uses in the nation’s 

waterbodies. The corresponding 

interest rate savings to municipalities, and ultimately to utility cusRecognizing Performance, Demonstr

ating Results 

saved $1.6 billion in interest costs as 

they cleaned up rivers, lakes, and 

streams for fishing and swimming. 

The following graphs not only illustrate overall support for Clean Water 

Act goals, but show how the 

CWSRFs focus on water quality 

problems. All graphs represent the 

cumulative data submitted by states 

to date. 

billion, over 60% of the total funding tomers, also illustrate the CWSRF’s 

ability to provide access to financing 

to achieve Clean Water Act goals. 

reported, goes to projects that aim 

first and foremost to preserve fish 

habitat, provide for water recreation, 

and protect drinking water. The 

proportion of CWSRF assistance to 

protect or restore these priority 

National 

Environmental 

Results 

The $5.4 billion in CWSRF loans 

reported in the environmental benefits effort have financed almost 800 

projects that serve nearly 65 million 

people. Over 600 borrowers have 

Funding for Clean 

Water Act Goals 

The measures show that the CWSRF 

directly supports the goals of the 

Clean Water Act by linking each 

project to a river, lake, or stream and 

to beneficial uses of that waterbody 

such as fishing and swimming. $3.3 

5 
6 

Targeting Assistance 

to Protect and 

Restore Waterbodies 

Maintaining high quality waters and 

returning polluted waters to a point 

where they are swimable and fishable are equally important reasons 

for funding. CWSRF programs 

reported more funding and an even 

higher percentage of projects to protect waterbody uses, but demonstrate a strong commitment to individual projects that help to restore 

water quality. 

PROTECTING

RESTORING

Total Assistance Number of Projects

$3.3

Billion

$2.5

Billion

374

190

Protecting and Restoring Waterbody Uses 

Advancing 

Public Health 

Clean Water State Revolving Fund Programs / 2005 Annual Report 

ational waters for nearly 16 million, 

and provide for safer fish and shellfish supplies for more than 3 million.* In addition, over 15 million 

people will benefit directly from the 

protection and restoration of fish 

and wildlife habitat. Water quality 

gains downstream of the improved 

treatment systems benefit many 

more people than the utility customers accounted for here. 

0

2

Drinking

Water

4

6

8

10

12

14

16

Aquatic Life

and Wildlife

Primary

Contact

Recreation

Secondary

Contact

Recreation

Fish and

Shellfish

Consumption

Other Millions of People

Protect Restore

Protection and Restoration of Uses of Impaired Waters: 

Population Served 

* Total users of the utility systems where 

reported CWSRF projects occur. 

The CWSRF not only gives utility 

customers savings on their sewer bill 

and improved wastewater services, 

but also better local water quality. 

Projects that clean up polluted 

streams, rivers, lakes, and estuaries 

will protect drinking water supplies 

for 3 million people, preserve recre­
Addressing Water 

Quality Priorities 

CWSRF programs rank all project 

applications for funding according 

to public health and compliance criteria. The benefits data evidences 

this approach, showing that more 

than twice as much funding goes to 

projects that achieve compliance 

versus those that simply maintain 

compliance. Projects that affect 

impaired or threatened waterbodies 

received $3.4 billion, far more than 

the $0.8 billion spent on projects 

where the waterbody is meeting 

standards. These differences are 

more pronounced in the distribution 

of subsidy* and in the average loan 

amount per project. 

Economic Benefits 

Environmental performance adds to 

the significant, documented economic benefits of the CWSRF’s investment in water quality. Clean rivers, 

lakes, and beaches sustain tourism 

revenues, commercial and recreational fisheries, irrigated agriculture, 

public water utilities, and industry. 

As sustainable infrastructure needs 

are projected to increase substantially 

over the next 20 years, the CWSRF 

will provide important economic 

benefits as a key source of financing 

for wastewater treatment. 

A recent EPA-commissioned study 

concluded that a sustained one billion dollar increase in debt-financed 

water infrastructure, such as CWSRF 

funding, would permanently add 

approximately 5,000 jobs over the 

next ten years. These gains, plus an 

initial increase of 16,000 to 22,000 

jobs, would come mostly in local 

infrastructure projects and in equipment manufacturing. 

* Subsidy indicates the interest rate savings for the full loan term when using the SRF interest rate instead of the market rate. 

Recognizing Performance, Demonstr

ating Results 

7 

33%

67%

72%

28%

81%

19%

82%

18%

COMPLIANCE WATERBODY STATUS

Assistance to

achieve compliance

maintain compliance

Subsidy to

achieve compliance

maintain compliance

Assistance to

impaired waterbodies

waterbodies that are meeting standards

Subsidy to

impaired waterbodies

waterbodies that are meeting standards

Funding Priorities: Comparing the Distribution of Assistance and Subsidy 
8 

Part of EPA’s ongoing efforts to support the CWSRF program is an 

annual business plan for continuing 

and developing new CWSRF program initiatives. The initiatives 

planned or underway demonstrate 

the Agency’s commitment to maximizing the performance of the 

CWSRF program. Two key components of the business plan, the effort 

to develop a system to report on 

environmental results (described in 

the previous section of this report) 

and the CWSRF awards program 

(described in the next section of this report) began successfully in 2005. 

Additional major business plan 

activities are described below. 

Enhancing State 

Outreach Techniques 

As the CWSRF program has 

matured, a significant number of 

state programs have become inter­

• Phase II: Develop and test useful 

outreach techniques, such as annual 

borrowers meetings and communications plans, that states may adopt 

to market the CWSRF program to 

prospective borrowers for high priority water quality projects. It will 

be helpful for EPA to learn more 

from the state and from prospective 

borrowers about real and perceived 

barriers and concerns inhibiting use 

of CWSRF financial assistance. 

After initial trials, states will settle 

on a suite of outreach techniques to 

use in the future. 

EPA will work alongside states to 

support their efforts. In addition, 

the Agency will document the marketing tools and techniques while 

developing a resource guide and 

other supporting materials (e.g, 

helpful tips; Q’s and A’s) that will be 

available to all states. 

Highlights from EPA’s


CWSRF Business Plan


Clean Water State Revolving Fund Programs / 2005 Annual Report 

ested in evaluating their approaches 

to conducting outreach to potential 

CWSRF borrowers. States’ interest 

in this topic illustrates their desire to 

continue to improve the program 

and to ensure that CWSRF funding 

will be used to address critical water 

quality projects. 

In 2005, EPA began working with 

the states of Michigan, Indiana, 

Oklahoma, and Hawaii on this project. It is expected that additional 

states will join the effort in 2006. 

This project will proceed in two 

phases: 

• Phase I: Conduct research to determine local borrowers’perceptions of 

their states’CWSRF programs. 

States are considering the use of 

surveys, focus groups, and interviews to gather this information. 

Training 

From the very beginning of the 

CWSRF program, EPA has provided 

annual training events to bolster the 

capabilities of state and EPA person

­

nel. Training workshops focus on 

the technical and financial aspects 

of SRF program management. The workshops are tailored to meet the 

needs of the intended audience, reflecting their experience/skill level 

and program interests. EPA conducts a rotating series of workshops 

in regions every other year for all 

CWSRF program personnel. EPA 

also supports the annual Council of 

Infrastructure Financing Authorities 

training workshop – a multi-day event that draws together all 51 

state programs to discuss salient 

management issues. 
To reach even more CWSRF program managers and staff, the 

Agency is also developing a complete set of training videos. Basic 

and more advanced video training 

will become available over the internet and on DVD within the next 

several years. 

Accreditation 

EPA Headquarters is developing a 

voluntary financial accreditation program for EPA Regional CWSRF personnel. Proper financial management oversight of the CWSRF programs within their respective regions 

is a major responsibility of the EPA 

Regional offices. The CWSRF financial accreditation program’s goal is to 

provide a set of educational and 

diagnostic resources that will 

enhance the Regions’ ability to maintain and improve SRF financial management capacity. It is hoped that 

EPA’s Regional offices will use the 

accreditation process as a training 

tool to strengthen their ability to 

evaluate the financial-related capabilities of the SRF programs. Also, the 

accreditation process will serve as a 

useful guidepost for planning future 

training activities. 

For EPA’s Regional staff, the accreditation program will provide an 

opportunity to be recognized as specialized experts in SRF financial 

management. As experts, they will 

be sought out during efforts to 

address difficult or unique SRFrelated issues. As new staff join 

EPA’s Regional offices, the accreditation program will help guide them 

as they develop their SRF management capabilities. 

During the next year, an initial exam 

will be developed that incorporates 

the most important financial elements of the CWSRF program. 

Topics will range from financial 

assistance options allowed under the 

CWSRF program regulations to the 

requirements for proper financial 

management oversight of state programs. A study fact sheet will 

describe the topics to be covered by 

the exam. A comprehensive reference guide will provide the resources 

needed for self-paced study and will 

include a list of printed materials, 

related available certification programs, continuing educational courses, and other resources that would 

be helpful to individuals seeking to 

increase their financial knowledge 

and their ability to analyze and support CWSRF programs. 

Recognizing Performance, Demonstr

ating Results 

9 
State Agencies that Manage CWSRF Programs 

EPA Region 1 – Boston, Massachusetts 

Connecticut Department of Environmental Protection 

Connecticut Office of the Treasurer 

Maine Municipal Bond Bank 

Maine Department of Environmental Protection 

Massachusetts Water Pollution Abatement Trust 

Massachusetts Department of Environmental Protection 

New Hampshire Department of Environmental Services 

Rhode Island Clean Water Finance Agency 

Rhode Island Department of Environmental Management 

Vermont Department of Environmental Conservation 

Vermont Municipal Bond Bank 

EPA Region 2 – New York, New York 

New Jersey Department of Environmental Protection 

New Jersey Environmental Infrastructure Trust 

New York State Environmental Facilities Corporation 

New York Department of Environmental Conservation 

Puerto Rico Environmental Quality Board 

Puerto Rico Infrastructure Financing Authority 

EPA Region 3 – Philadelphia, Pennsylvania 

Delaware Department of Natural Resources 

and Environmental Control 

Maryland Department of the Environment 

Pennsylvania Infrastructure Investment Authority 

10	 Pennsylvania Department of Environmental Protection 

Virginia Department of Environmental Quality 

Virginia Resources Authority 

West Virginia Department of Environmental Protection 

West Virginia Water Development Authority 

EPA Region 4 – Atlanta, Georgia 

Alabama Department of Environmental Management 

Florida Department of Environmental Protection 

Georgia Environmental Facilities Authority 

Kentucky Infrastructure Authority 

Kentucky Division of Water 

Mississippi Department of Environmental Quality 

North Carolina Department of Environment and Natural Resources 

South Carolina Department of Health and Environmental Control 

South Carolina Budget and Control Board 

Tennessee Department of Environment and Conservation 

Tennessee Comptroller of the Treasury 

EPA Region 5 – Chicago, Illinois 

Illinois Environmental Protection Agency


Indiana Department of Environmental Management


Indiana State Budget Agency


Michigan Department of Environmental Quality


Michigan Municipal Bond Authority


Minnesota Public Facilities Authority


Clean Water State Revolving Fund Programs / 2005 Annual Report 

Minnesota Pollution Control Agency 

Minnesota Department of Agriculture 

Ohio Environmental Protection Agency 

Ohio Water Development Authority 

Wisconsin Department of Natural Resources 

Wisconsin Department of Administration 

EPA Region 6 – Dallas, Texas 

Arkansas Soil and Water Conservation Commission 

Arkansas Development Finance Authority 

Louisiana Department of Environmental Quality 

New Mexico Environment Department 

Oklahoma Water Resources Board 

Texas Water Development Board 

EPA Region 7 – Kansas City, Missouri 

Iowa Department of Natural Resources 

Iowa Finance Authority 

Kansas Department of Health and Environment 

Kansas Department of Administration 

Kansas Development Finance Authority 

Missouri Department of Natural Resources 

Missouri Environmental Improvement 

and Energy Resources Authority 

Nebraska Department of Environmental Quality 

Nebraska Investment Finance Authority 

EPA Region 8 – Denver, Colorado 

Colorado Water Resources and Power Development Authority 

Colorado Department of Public Health and Environment 

Colorado Department of Local Affairs 

Montana Department of Environmental Quality 

Montana Department of Natural Resources and Conservation 

North Dakota Department of Health 

North Dakota Municipal Bond Bank 

South Dakota Department of Environment and Natural Resources 

Utah Department of Environmental Quality 

Wyoming Department of Environmental Quality 

Wyoming Office of State Lands and Investments 

EPA Region 9 – San Francisco, California 

Arizona Water Infrastructure Finance Authority 

California State Water Resources Control Board 

Hawaii Department of Health 

Nevada Department of Conservation and Natural Resources 

EPA Region 10 – Seattle, Washington 

Alaska Department of Environmental Conservation 

Idaho Department of Environmental Quality 

Oregon Department of Environmental Quality 

Washington Department of Ecology 
The high level of professionalism 

among program managers has resulted in many innovations that 

have made the CWSRF a model 

government subsidy program. The 

2005 PISCES Awards (Performance 

and Innovation in the SRF Creating 

Environmental Success) acknowl­

edge the important work conducted by state program managers and the 

advancement of EPA goals of performance and water quality protection through the use of the Clean Water State Revolving Fund. 

Besides recognition, the PISCES Awards serve to highlight program 

innovations to allow other programs 

the opportunity to replicate program 

designs or build upon a preexisting 

idea to further enhance performance. In 2005, state programs were recognized for their accomplishments. In 2006, borrowers with 

superb planning, implementation, 

and management strategies will be recognized. Individual projects will 

be showcased from each EPA region. 

This past year, ten states, one from 

each region, received awards for 

their outstanding achievements. 

Each Regional office nominated a 

candidate state program based on 

multiple criteria. First, each nomi­

nee needed a fund utilization rate 

(pace) greater than 80% and audits 

that revealed no serious program­

matic or financial problems with the 

program. Each nominee also had to 

demonstrate outstanding performance for at least two out of nine 

additional criteria: better management practices, full-cost pricing, efficient water use, watershed 

approach, promotion of creative use 

of technologies, leveraging practices, 

innovative partnerships, innovative 

lending practices, and replicability. 

The winners of the 2005 CWSRF 

PISCES Awards are: 

Region 1 – Maine 

Region 2 – New York 

Region 3 – Delaware 

Region 4 – Florida 

Region 5 – Ohio 

Region 6 – Oklahoma 

Region 7 – Kansas 

Region 8 – Montana 

Region 9 – California 

Region 10 – Oregon 

These ten states serve as excellent 

examples of high quality performance, integrity, and creativity in the 

CWSRF program. Winners were 

recognized at the national meeting 

of the Council of Infrastructure 

Financing Authorities (CIFA) in 

Chicago, IL in October of 2005. 

Short descriptions of each state’s 

exemplary practices follow. 

CWSRF PISCES Awards:


Performance and Innovation in the SRF


Recognizing Performance, Demonstrating Results 

11 
Clean Water State Revolving Fund Programs / 2005 Annual Report 

12 

REGION 7: Kansas 

The Kansas Department of Health and 

Environment uses its CWSRF program to 

encourage development and use of new treatment processes and plant designs including the 

use of state-of-the-art technologies, such as UV 

disinfection technology, BNR activated sludge 

designs, long detention lagoons, and non-overflowing lagoons. 

REGION 6: Oklahoma 

With its Integrated Priority Ranking System, the 

Oklahoma Water Resources Board adopted a watershed 

approach that ranks projects for funding based on the 

goals of the Clean Water Act and the state’s Unified 

Watershed Assessment to eliminate human health 

threats, restore impaired surface waters, and protect 

high quality waters and their uses. 

REGION 8: Montana 

The Montana CWSRF program has used almost 25 percent of its 

funding over the past five years, $23 million, for implementation 

of the state’s Section 319 non-point source management plan. 

The Departments of Environmental Quality and Natural 

Resources and Conservation also developed the Uniform 

Application Supplement for Montana Public Facilities Projects, which 

helped to increase pace from 65 to 100 percent. 

REGION 10: Oregon 

The Oregon Department of Environmental 

Quality (ODEQ) makes efficient water use a 

priority by promoting the use of wastewater 

effluent for irrigation and appropriate urban 

uses and by making loans to irrigation districts that support water efficiency. One 

loan was used to move an irrigation district’s water supply out of a stream into a 

pipeline, reducing erosion and turbidity in a 

stream that is habitat for an endangered 

species. 

2005 PISCES Award Winners: 

Performance and Innovation in 

REGION 9: California 

After making sustainability of water and 

environmental resources a core value for its 

CWSRF program, the California State Water 

Resources Control Board (SWRCB) worked 

with staff to incorporate sustainability into 

the CWSRF’s policy and future funding 

decisions. 
REGION 1: Maine 

Demonstrating innovative lending practices, the Maine 

Municipal Bond Bank and Maine Department of 

Environmental Protection have set aside $2 million for private 

septic repair and replacement loans and give farmers access to 

2% loans for the construction of manure storage facilities. 

Using creative financial approaches, Maine refinanced $36 

million in loans and leveraged the money that was freed up, 

resulting in over $20 million of additional available funding. 

REGION 2: New York 

New York’s CWSRF program leads the country in funding nonpoint source projects, with over $739 million in 

loans made through 2005. The New York State 

Environmental Facilities Corporation also implemented 

a new leveraging technique that allowed it to sell 

subordinated SRF bonds without a reserve fund 

pledge, resulting in a loan interest rate of 1.94%. 

REGION 3: Delaware 

Through innovative partnerships, the Delaware Department of 

Natural Resources and Environmental Control streamlined project review and management processes, enhanced marketing and 

implementation of agricultural best management practices, and 

promoted the use of CWSRF loans to implement nonpoint 

source projects. 

REGION 5: Ohio 

With $3 billion in loans, the Ohio EPA and 

Water Development Authority are leaders in 

financing non-traditional projects. Ohio’s 

latest innovation, the Water Resource 

Restoration Sponsor Program (WRRSP), has 

made over $67 million worth of loans for 

projects that have acquired wetlands, riparian lands, and conservation easements, 

restored habitat, and modified dams. 

REGION 4: Florida 

To promote efficient water use, the Florida 

Department of Environmental Protection funded 83 

projects totaling over $260 million for water reuse 

projects. The CWSRF-financed Holloway Tree Farm 

irrigation system has conserved over 100 million gallons of water without compromising plant growth. 

13 

n the CWSRF 

Recognizing Performance, Demonstr

ating Results 
14 Clean Water State Revolving Fund Programs / 2005 Annual Report

CWSRF 2005 Performance Highlights

10

20

30

40

500 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Assistance, Annual Assistance, Cumulative

Billions of Dollars 2005

CWSRF Cumulative Assistance Reaches $52.7 Billion in 2005 

A Growing Source 

of Project Financing 

In 2005, the CWSRF program funded $4.9 billion in projects, raising 

cumulative assistance to nearly $53 

billion. The program funds an estimated 10 to 20 percent of the 

nation’s annual wastewater capital 

projects. Municipalities, states, and 

other federal programs provide the 

remaining funding. Funding Critical 

Projects 

In 2005, the CWSRF continued to 

fund a broad range of projects. Wastewater system projects 

accounted for 96 percent of the total 

funding and 61 percent of the total 

number of agreements. Funding for 

nonpoint source pollution control 

projects remains strong. Projects 

such as agricultural controls to 

reduce runoff and measures to protect drinking water sources accounted for $232 million of total funding 

in 2005, a remarkable increase from 

the $168 million allocated to nonpoint source projects in 2004. While 

this only accounts for 4 percent of 

total funding, it represents 39 percent of assistance agreements. From 

1988 to 2005, nonpoint source proj­

ects represented 27 percent of all 

assistance agreements. 

Serving All 

Communities 

The CWSRF program has traditionally funded many small and medium-sized communities. In 2005, 53 

percent of all loan agreements went 

to communities with populations of 

fewer than 3,500, and 67 percent of 

all loans went to communities with 

populations below 10,000. 
Recognizing Performance, Demonstr

ating Results 

15 

CWSRFs Fund $52.7 Billion in Clean Water Needs through 2005 

Secondary

Treatment

42%

Advanced

Treatment

18%

New

Sewers

20%

SSO

10%

CSO

9%

Stormwater/Recycled

Water

1%

Nonpoint Source

and Estuary

4%

POTW

96%

POTW: Publicly Owned Treatment Works

CSO: Combined Sewer Overflow

SSO: Sanitary Sewer Overflow

Communities Served by CWSRFs in 2005 

53%

12%

15%

21%

29%

49%

11%

11%

Dollar Amount of Assistance ($4.9 Billion) Number of Assistance Agreements (1,448)

100,000 and above 10,000–99,999

3,500–9,999 Under 3,500

Population:
16 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

2

3

4

5

6

7

8

Market Rate * CWSRF Interest Rate

* Market rate is measured as the Bond Buyer Index for

20-year, Aa-rated GO bonds.

Percent

4.9%

2.2%

CWSRF Loans Save Communities 21% (2005 Average) 

CWSRF Loans 

Save Communities 

21% on Average 

According to a popular municipal 

borrowing index, the typical municipal borrowing rate was 4.9 percent 

in 2005. The average CWSRF interest rate offered on loans was 2.2 

percent. The average cost savings 

realized by CWSRF borrowers represented a 21 percent savings on 

financing costs. 

CWSRFs Return 2.12 Times the Federal Investment in 2005 

High Return on 

Federal Investment 

The ratio of CWSRF project disbursements (i.e., total cash out to 

pay invoices) compared to total federal outlays for projects (cash drawn 

from federal funds) is a measure of 

return on the federal investment to 

date. Currently 2.12, as compared to 

2.05 for 2004, the return on federal 

investment is growing and will continue to grow due to the revolving 

Clean Water State Revolving Fund Programs / 2005 Annual Report 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Federal Outlays CWSRF Disbursements

5

10

20

25

30

35

40

45 Billions of Dollars (Cumulative) $44.9

$21.1

15

0 1988 1989 1990

nature of the CWSRF 

program. 
Available CWSRF 

Funds are Quickly 

Used for New 

Project Assistance 

95% of CWSRF Funds Committed to Projects in 2005 

Due to low interest rates and broad 

financing eligibilities, CWSRF funding continues to be in high demand. 

In 2005, 95 percent of all available 

funds were committed to new projects. This efficient rate of fund utilization is one reason that the return 

on federal investment will continue 

to grow impressively over time. 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Assistance Provided Funds Available

1 0

2 0

3 0

4 0

Billions of Dollars (Cumulative)

5 0

6 0

$55.3

0

$52.7

Continued Growth 

of Loan Assistance 

Cumulative CWSRF loan assistance 

has demonstrated strong growth 

over the first 18 years of the program. National modeling projects 

that loan volume will expand rapidly, topping $110 billion in 2025. 

Recognizing Performance, Demonstr

ating Results 

1988

25

50

75

100

0

125

$16.7 M

$19.8

$83.9

$111.4

$52.7

1997 2005 2015 2025

Billions of Dollars

Past and Future Growth of Assistance: 

CWSRF Executed Loan Agreements 

17 
18 

The Clean Water Act requires an 

annual financial audit of the 51 

state-level CWSRF programs. Each 

state and Puerto Rico conducts 

these audits according to the generally accepted auditing standards 

established by the Governmental 

Accounting Standards Board 

(GASB). GASB offers guidelines to 

the governmental accounting profession to determine the best fund 

structures for state programs such as 

the CWSRFs. States often define 

their CWSRF programs as ongoing 

enterprise funds under the GASB 

definitions of funds. The standard­

ized financial statements used in 

enterprise fund reporting for CWSRF 

programs include the following: 

Statement of 

Net Assets 

This statement describes a fund’s 

assets and liabilities through the end 

Statement of 

Revenues, Expenses, 

and Earnings 

This statement describes the performance of the CWSRF fund over 

the reporting period. The statement 

of revenues, expenses, and earnings 

reports on the overall performance 

of the fund during the reporting 

period. 

Statement of 

Cash Flows 

This statement provides a detailed 

accounting of the actual flow of cash 

into and out of the CWSRF fund. 

Because the 51 constituent CWSRF 

programs are independent statelevel entities, no nationally audited 

CWSRF program financial reports 

are available. However, using EPA’s 

CWSRF National Information 

Management System, national 

Clean Water State Revolving Fund Programs / 2005 Annual Report

2005 Financial Performance Overview


of the fiscal year. Assets include 

financial assets and capital assets. 

Liabilities include both current and 

long-term liabilities. CWSRF fund 

assets include grant funds that have 

been drawn from the federal treasury to date, but do not include total 

grant awards. Several years ago, a 

new GASB rule created the statement of net assets as a replacement 

for the balance sheet statement. The 

“net asset”section of the statement 

of net assets replaced the “equity” 

section of the balance sheet. 

aggregate financial statements have 

been developed and are included on 

the following pages. The statements 

are best viewed as non-audited, 

cash flow-based financial reports. 
2005 Financial Statement Highlights 

Statement of Net Assets 

• 	Total assets increased by $2.6 billion (5.9% increase from 2004). 

• CWSRF program equity (also called net assets) totals $28.4 billion (6.9% increase from 2004). 

•	 Program liabilities increased by $0.8 billion, reflecting the net growth in CWSRF bonds 

outstanding for state matching funds and leveraged program financing (4.3% increase from 2004). 

Statement of Revenues, Expenses, and Earnings 

• Total program revenues exceeded expenses by $1.9 billion. 

• Interest earnings from loans and investments totaled nearly $1.5 billion (17.1% increase from 2004). 

• Administrative expenses were 2.9 percent of operating revenues (down from 3.5% in 2004). 

Statement of Cash Flows 

• Loan principal repayments to CWSRF programs were nearly $1.8 billion. 

• Leveraged bond proceeds added more than $1.5 billion to program cash flow. 

Recognizing Performance, Demonstr

ating Results 

19 
20 

Clean Water State Revolving Fund National Performance Summary Statement 

Statement of Net Assets - Estimated ($ Millions) 

2005 2004 

Assets 

Cash and Cash Equivalents 8,573.4 8,965.3 

Debt Service Reserve - Leveraged Bonds 6,516.2 5,868.1 

Loans Outstanding 31,676.7 29,308.1 

Unamortized Bond Issuance Expenses 271.4 260.7 

Total Assets 47,037.6 44,402.2 

Liabilities 

Match Bonds Outstanding 669.5 679.8 

Leveraged Bonds Outstanding 17,989.0 17,202.3 

Total Liabilities 18,658.5 17,882.0 

Net Assets 

Federal Contributions 21,135.7 19,825.5 

State Contributions 3,634.0 3,494.6 

Transfers of Non-Federal Funds from (to) DWSRF (354.8) (310.1) 

Other Net Assets 3,964.2 3,510.2 

Total Net Assets 28,379.1 26,520.2 

Total Liabilities and Net Assets 47,037.6 44,402.2 

Note: Under the new GASB 34 rules,“equity”is termed “net assets,”and is defined as the difference between assets and liabilities.


Statement presents a compilation of reporting from 51 State programs and is not audited.


Source: EPA's CWSRF National Information Management System.


Clean Water State Revolving Fund Programs / 2005 Annual Report 
Assets are Growing Faster then Liabilities 

Growth of CWSRF Assets 

Recognizing Performance, Demonstr

ating Results 

0

5

10

15

20

25

30

35 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Billions of Dollars

Cash and Cash Equivalents

Loans Outstanding Debt Service Reserve

Billions of Dollars 50 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

45

40

35

30

25

20

15

10

5

0

Assets Net Assets Liabilities

21 
22 

Clean Water State Revolving Fund National Performance Summary Statement 

Statement of Revenues, Expenses, and Earnings - Estimated ($ Millions) 

2005 2004 

Operating Revenues 

Interest on Investments 583.3 421.4 

Interest on Loans 882.8 830.8 

Total Operating Revenues 1,466.2 1,252.2 

Operating Expenses 

Bond Interest Expenses 953.3 799.3 

CWSRF Funds Used for Refunding 2.5 31.4 

Amortized Bond Issuance Expenses 13.0 12.0 

Administrative Expenses 43.2 43.5 

Total Expenses 1,012.1 886.3 

Nonoperating Revenues and Expenses 

Federal Contribution 1,310.2 1,415.3 

State Contributions 139.4 189.1 

Transfers from (to) DWSRF (44.7) 8.3 

Total Nonoperating Revenues (Expenses) 1,404.9 1,612.7 

Increase (Decrease) in Net Assets 1,859.0 1,978.6 

Net Assets 

Beginning of Year 26,520.2 24,541.6 

End of Year 28,379.2 26,520.2 

Note: Statement presents a compilation of reporting from 51 state programs and is not audited.


Source: EPA’s CWSRF National Information Management System.


Clean Water State Revolving Fund Programs / 2005 Annual Report 
Recognizing Performance, Demonstr

ating Results 

Interest Comprises over Half of CWSRF Revenues 

Millions of Dollars

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Interest on Loans

Nonoperating Renevues

Interest on Investments

Operating Revenues

Revenues Significantly Exceed Expenses 

0

500

1,000

1,500

2,000

2,500 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Millions of Dollars

Operating Revenues

Nonoperating Renevues Operating Expenses

Change in Net Assets

23 
24 

Clean Water State Revolving Fund National Performance Summary Statement 

Statement of Cash Flows - Estimated ($ Millions) 

2005 2004 

Cash Flows from Operating Activities 

Cash Draws from Federal Capitalization Grants 1,310.2 1,415.3


Contributions from States 139.4 189.1


Loan Disbursements Made to Borrowers (4,165.7) (4,297.5)


Loan Principal Repayments 1,797.1 2,064.0


Interest Received on Loans 882.8 830.8


Administrative Expenses (43.2) (43.5)


Net Cash Provided by Operating Activities (79.4) 158.1 

Cash Flows from Noncapital Financing Activities 

Gross Leveraged Bond Proceeds 1,614.1 2,927.0 

Bond Issuance Expense (23.7) (32.7) 

State Match Bond Proceeds 64.5 66.2 

Cash Received from Transfers with DWSRF (44.7) 8.3 

Interest Paid on Leveraged and State Match Bonds (953.3) (799.3) 

CWSRF Funds Used for Refunding (2.5) (31.4) 

Principal Repayments of Leveraged Bonds (827.3) (731.7) 

Principal Repayments of State Match Bonds (74.8) (55.0) 

Net Cash Provided by Noncapital Financing Activities (247.8) 1,351.4 

Cash Flows from Capital and Related Financing Activities 0.0 0.0 

Cash Flows from Investing Activities 

Interest Received on Investments 583.3 421.4 

Deposits to Debt Service Reserve for Leveraged Bonds (648.1) (753.0) 

Clean Water State Revolving Fund Programs / 2005 Annual Report 

Beginning Balance - Cash and Cash Equivalents 8,965.3 7,787.5 

Ending Balance - Cash and Cash Equivalents 8,573.4 8,965.3 

Note: Statement presents a compilation of reporting from 51 state programs and is not audited. 

Source: EPA’s CWSRF National Information Management System. 

Net Cash Provided by Investing Activities (64.7) (331.6) 

Net Increase (Decrease) in Cash and Cash Equivalents (391.9) 1,177.8 
Return of 2.12 Times the Federal Investment 

95% of Funds Committed to Projects 

2.2% Average CWSRF Interest Rate in 2005, 4.9% Market Rate 

21% Average Savings over Market Rate Loans 

27 States Leverage; 20 Issue Match Bonds 

37 States Fund Nonpoint Source Projects 

29 States Use Integrated Priority Systems 

43 States Conduct Separate Audits 

40 States Fund Separate Grant or Loan Programs 

Assistance Provided to Projects (Billions of Dollars) 

2005 1988–2005 

Total, by Project Type $4.9 $52.7 

Wastewater Treatment 4.77 50.0 

Nonpoint Source 0.23 2.1 

Estuaries 0 0 

Unallocated 0 0.6 

Total, by Population Served $4.9 $52.7 

< 3,500 0.56 5.5 

3,500 - 9,999 0.53 6.6 

10,000 - 99,999 1.39 17.7 

100,000 and Above 2.38 22.9 

# of Loans, by Population Served 1,448 16,752 

< 3,500 770 7,964 

3,500 - 9,999 213 2,631 

10,000 - 99,999 298 4,295 

100,000 and Above 167 1,862 

Source: EPA’s CWSRF National Information Management System 

Funds Available for Projects (Billions of Dollars) 

2005 1988–2005 

Total Funds $3.8 $55.3 

Federal Capitalization Grants 1.36 23.3 

State Match 0.20 4.8 

Net Leveraged Bonds 0.94 16.9 

Net Loan Principal Repayments 0.97 7.3 

Net Earnings 0.44 4.3 

Net Transfers with DWSRF (.04) (.4) 

(Less Administration) (.05) (.9) 

CWSRF-at-a-Glance 

For more information about the Clean Water State Revolving Fund, please contact: 

Clean Water State Revolving Fund Branch 

U.S. Environmental Protection Agency 

1201 Constitution Avenue, NW (Mailcode 4204M) 

Washington, DC 20004 

Phone: (202) 564-0752 

Fax: (202) 501-2403 

Internet: www.epa.gov/owm/cwfinance/cwsrf 
 

 

Office of Water • March 2006 • EPA-832-R-06-001 

Alabama Department of Environmental 

Environmental Conservation • Arizona W 

Arkansas Development Finance Authority 

Commission • California State Water R

Department of Local Affairs • Colora

Environment • Colorado Water Resourc

Connecticut Department of Environmental 

Treasurer • Delaware Department of Natur 

• Florida Department of Environmental Pro

Authority • Hawaii Department of Health • I

• Illinois Environmental Protection Agenc

Management • Indiana State Budget Agency 

• Iowa Finance Authority • Kansas Departm 

of Health and Environment • Kansas De

Division of Water • Kentucky Infrastruct

Environmental Quality • Maine Departme

Municipal Bond Bank • Maryland Departm

Department of Environmental Protection • 

Trust • Michigan Department of Environm

Authority • Minnesota Department of Ag

Agency • Minnesota Public Facilities 

Environmental Quality • Missouri Depart

Environmental Improvement and Energy Res

Environmental Quality • Montana Departme

• Nebraska Department of Environmental 

Authority • Nevada Department of Cons

Hampshire Department of Environmental 

Environmental Protection • New Jersey E

Mexico Environment Department • Ne

Conservation • New York State Environment 

Department of Environment and Natural R 

Health • North Dakota Municipal Bond Ban

• Ohio Water Development Authority • Ok

Department of Environmental Quality • 

Authority • Pennsylvania Department of 

Environmental Quality Board • Puerto R

Rhode Island Clean Water Finance A

Environmental Management • South Caro

Carolina Department of Health and E

Department of Environment and Natural R

Treasury • Tennessee Department of Envi

Development Board • Utah Department 

Department of Environmental Conservation 

Department of Environmental Quality • V

Department of Ecology • West Virginia Depa

Virginia Water Development Authority • W

Wisconsin Department of Natural Resource

Quality • Wyoming Office of State Lands a